Wind Turbine Blades

WFW advises DONG Energy on the £425m project financing for the Lincs offshore wind farm project

24 July 2012

Watson, Farley & Williams (“WFW”), a leading international law firm, is pleased to announce that it has advised DONG Naturgas A/S offtaker on the £425m project financing for the Lincs offshore wind farm project. WFW also advised DONG Energy as co-lender to the commercial banks.

The 270MW wind farm, which will lie eight miles off the coast of Skegness in Lincolnshire, is a joint venture between sponsors Centrica, DONG Energy and Siemens Project Ventures GmbH. Ten banks including BNP Paribas, Nordea Bank, HSBC Bank and Lloyds Banking Group are providing the commercial bank tranche. Construction at the project began in 2010 and it will be fully operational by 2013.

The deal represents the first limited-recourse construction financing for an offshore wind project in the UK. It demonstrates lenders taking construction risk in offshore wind, and is also the first financing that will address the disposal of an offshore transmission asset.

Morten Hultberg Buchgreitz, acting deputy chief executive officer of DONG Energy Wind Power said: “We’re very pleased with the interest and effort the banking group have shown and put into establishing the Lincs project financing. That the project is still in its construction phase and that a multi-contracting strategy has been chosen adds to the complexity of project financing and makes this milestone quite an accomplishment.”

Evan Stergoulis, partner and Energy sector head at WFW said: “The financial close of the Lincs offshore wind farm project is an encouraging sign that financial institutions are increasingly willing to provide long-term loans for offshore wind projects, which are properly structured. It is also a proud achievement for WFW, coming closely on the back of project financings of offshore wind farms in Germany and Belgium, where we acted as lenders’ counsel.”

Slaughter & May advised Lincs, as borrower under the commercial bank tranche, on the deal; BTMU acted as financial adviser on the project.