Equinor and SSE have reached a financial close in the first two phases of the Dogger Bank wind farm Project, which represents the biggest offshore wind project financing in the world to date.
Total senior debt facility over the two phases is £4.8 billion plus ancillary facilities of about £0.7 billion. Dogger Bank A and B are being project financed with gearing of 65 percent to 70 percent for the generation assets. The transmission facility gearing is set at 90 percent of the planned sales proceeds of OFTO.
“Reaching financial close on the two first phases of Dogger Bank is a major milestone, demonstrating our commitment to profitable growth within offshore wind. The extensive interest from lenders underpins the attractiveness of UK offshore wind assets and confidence in SSE and Equinor. As the wind farm’s future operator, we are proud to take this big step forward in delivering what will be the backbone of a growing wind hub in the North Sea.”Pål Eitrheim, Equinor’s executive vice president of new energy solutions.
With the strong interest of lenders, Dogger Bank A and B were able to achieve competitive terms, considering the extraordinary economic circumstances resulting from the global coronavirus pandemic.
The final group of lenders, comprising 29 banks and three export credit agencies, comprises seasoned lenders in the sector along with partnership lenders from both SSE and Equinor.
The level of interest achieved represents the quality of the project and allows for a good return on shareholder capital.
“Equinor is committed to being a leading company in the energy transition and to helping the UK Government deliver on its 10-point plan for a green industrial future. Through the sheer scale of the project we have delivered record-low contract prices for the UK market, and as operator of the wind farm we will continue to deliver value to the UK for years to come. Dogger Bank will generate renewable electricity for British homes, whilst creating jobs and attracting significant investment to the UK.”Pål Eitrheim, Equinor’s executive vice president of new energy solutions.
The project is being designed in three phases of 1.2 GW, with the first two phases being installed at the same time to take advantage of the synergies arising from their geographical proximity and the use of similar technologies and contractors.
As such, the two phases are funded in equal proportions with all lenders involved in each phase. Dogger Bank A and B would also need a total capital expenditure of approximately £3 billion, including the capex for the offshore transmission station.
The third step, Dogger Bank C, is being established at a different timeline with financial closeness to follow at a later point.
SSE Renewables is leading the construction of a 3.6 GW project and Equinor will lead the operation of the wind farm.