Dong Energy has entered into an agreement to sell 50% of its 573MW UK offshore wind farm project at Race Bank to Macquarie Group – with equal interests.
Race Bank is currently in advanced stages of construction and is expected to be fully commissioned in 2018. Dong and Macquarie have agreed a framework for sharing construction risk. The total transaction proceeds, consisting of the acquisition of a 50% ownership share and commitment to fund 50% of the project capital expenditure (capex) including transmission assets, amount to approx. £1.6 billion. The proceeds are payable from 2016 until completion of the project, which is expected in 2018 and is funded by a combination of project finance debt and equity.
The 50% share has been snapped up by Macquarie European Infrastructure Fund 5 and Macquarie Capital, the principal investment arm of the Macquarie Group.
“I welcome Macquarie as partner on Race Bank. They have successfully invested in infrastructure projects world-wide and have experience in offshore wind from previous investments,” said Samuel Leupold, chief executire of wind power at Dong Energy, adding: “We have seen a high level of interest from a number of potential investors in Race Bank. This proves that our partnership model continues to be attractive.”
Mark Dooley, head of energy and infrastructure, Macquarie Capital Europe added: “We are delighted to partner with Dong Energy on the Race Bank Offshore Wind Farm. Dong Energy is an industry leader and pioneer in offshore wind power development globally. Macquarie Group launched in the UK in 1989 and has since invested £6 billion of capital into European renewables – and this further demonstrates our ongoing focus and commitment to the offshore wind sector.”
Martin Stanley, global head of Macquarie Infrastructure and Real Assets, commented: “We have a long and successful history of investing in renewable energy around the world. Our funds have invested in wind farms, biomass power plants, photo-voltaic and hydro-electric facilities together with landfill gas generation. This investment is being made by our fifth European infrastructure fund which reached a final close earlier this year.”
Dong Energy will manage the completion of the construction phase under a construction management agreement. Dong Energy has also entered into an agreement to provide operations and maintenance services from its O&M base in Grimsby and to provide a route to market for the power production and green certificates for Macquarie’s 50% share of Race Bank.
The wind farm, consisting of 91 Siemens 6MW wind turbines, is expected to be fully commissioned in 2018. It will be located approximately 16.8 miles off Blakeney Point on the North Norfolk coast and 17.4 miles off the Lincolnshire coast at Chapel St Leonards.