Wind Turbine Blades

WFW advises DONG Energy on shareholder refinancing of £224m of a minority stake in the 367 MW Walney wind farm

8 January 2013

Watson, Farley & Williams (WFW), a leading international law firm, is pleased to announce that it has advised DONG Energy on the refinancing by OPW (a joint venture between Dutch investment firm Ampere Equity Fund and Dutch pension fund manager PGGM) and holder of a 24.8% stake in the 367 MW Walney wind farm off the UK coast.

The loan to OPW was provided by a consortium of lenders comprising Lloyds Banking Group, Royal Bank of Scotland, Santander, Siemens Bank and the UK Green Investment Bank, who are providing a seven-year single tranche debt facility. The loan marks the state-owned UK Green Investment Bank’s first deal in the offshore wind market. The debt financing covers OPW’s 24.8% stake in the Walney wind farm, is non-recourse and provided at the shareholder level, rather than the operating company level.

The project was developed, constructed by and is now operated by DONG, which holds a 50.1% share. The third partner in the project is Scottish & Southern Energy, which owns 25.1%.

The transaction was led by WFW partner and head of energy, Evan Stergoulis, with associates Simon Alsey, Emma Teague, Stuart Postle and Natalie Georgiou.

WFW previously acted on the structuring of the joint venture, sell downs to SSE and OPW and the bridge financing to OPW by DONG. WFW also previously acted for DONG on the Gunfleet transaction where Marubeni obtained similar financing at the shareholder level.

Commenting on the deal, Evan Stergoulis said: “In the UK offshore wind market, where utility sponsors dominate, financing at shareholder level rather than project level is becoming increasingly important. Such structures allow utilities to partner with other non-utilities, who may require financing. Financing at the operating company level can pose concerns for utilities, so shareholder level finance avoids these difficult issues. The structures used in Walney and previously in the Marubeni debt financing for Gunfleet, were developed to seek to maximise leverage at the shareholder level. The five lenders to Walney are in addition to the four that were used on the Gunfleet transaction and demonstrate a growing depth in the project finance markets for joint venture financing.”