Statoil, Statkraft, Masdar Raise $1.9B for Dudgeon Wind Farm

  • Project is first to raise funds under new U.K. subsidy system
  • Offshore 402-megawatt wind farm due to be completed in 2017

One of the world’s biggest offshore wind farms, being developed off the U.K. coast, secured 1.3 billion pounds ($1.9 billion) in project refinancing six months after it started fundraising.

The 402-megawatt Dudgeon project, under construction off the north Norfolk coast, is the first offshore wind farm to obtain financing under the U.K. government’s new “contract for difference” system, according to a statement Thursday by Allen & Overy, a law firm advising the mandated lead arranger.

The three-phase project, due to be commissioned in 2017, has a government contract to supply energy at 150 pounds per megawatt hour that it won in April 2014.

The Dudgeon offshore wind farm reached financial close in September 2014, with financing from owners Statoil ASA, Statkraft AS and Abu Dhabi’s Masdar. Now it has raised recourse financing to fund the capital requirements of the project, according to the statement.

Project Confidence

“Closing such a significant phase of the project’s development so swiftly illustrates the energy industry’s confidence in the long-term potential of offshore wind, and the increasing sophistication of financing models available to the sector,” Halfdan Brustad, chairman of Dudgeon Offshore Wind Ltd., said in a statement.

Statkraft will finance its 30 percent stake in the wind farm, while Statoil will finance a share of 17.5 percent, according to the statement.

Mandated lead arrangers comprise Bank of Tokyo-Mitsubishi UFJ; BNP Paribas Fortis SA; Credit Agricole Corporate and Investment Bank; KfW IPEX-Bank GmbH; Mizuho Bank; Abbey National Treasury Services Plc; Siemens Bank GmbH; Societe Generale; and Sumitomo Mitsui Banking Corp.

Allen & Overy and Linklaters were legal advisers, while Societe Generale advised on financials, SgurrEnergy was technical adviser and Aon and Willis was insurance adviser.

“Either Statkraft and Statoil think construction risk has fallen or the project has reached a point that risk has been sufficiently dealt with,” said Keegan Kruger, an analyst at Bloomberg New Energy Finance. “An increase in gearing ratio often indicates lower financial risk and if commercial lenders are piling in, that is a sure sign it is.”

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