Financial close for Humber Gateway OFTO project

Balfour Beatty and Equitix have reached financial close for the Humber Gateway offshore transmission project (OFTO) in UK. 

The total project investment is estimated at £173.3 million (US$231 million). Balfour Beatty will invest £12.5 million of the total required equity of £21 million, the remaining £8.5 million will be provided by Equitix. The European Investment Bank (EIB) has agreed to provide £82 million 19 year long-term EIB loan. Additionally, project financing includes senior debt provided by three commercial banks: Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank and Societe Generale.

The high-voltage electricity transmission link connects E.ON’s 219 MW offshore wind farm in the North Sea, 8km from the east Yorkshire coast, to the onshore transmission grid. The 73 turbines are capable of generating enough electricity for around 170,000 homes each year.

The Balfour Beatty Equitix Consortium will own and operate the offshore transmission link to E.ON’s Humber Gateway wind farm for the next 20 years. Balfour Beatty’s Power Transmission and Distribution business will be responsible for the operation and maintenance of the OFTO’s assets, including one offshore and one onshore substation and two cable circuits consisting of 18 kilometres of subsea and 30 kilometres of land cable.

Ian Rylatt, Balfour Beatty Investments Chief Executive, stated:

“This is our fourth OFTO contract to reach financial close and further establishes our position in the offshore transmission market. Our technical expertise ensures we can efficiently and effectively, support the government’s targets to meet more of the UK’s energy needs through renewable sources.” 

Hugh Crossley, Equitix’s Chief Investment Officer, added:

“Equitix’s commitment to the offshore transmission market is testament to our investors’ appetite for long term, availability-based, inflation-linked, UK infrastructure.  We are pleased to be working in partnership with Balfour Beatty and Ofgem for the benefit of our investors and stakeholders”.

Jonathan Taylor, European Investment Bank Vice-President commented:

“Investment to harness the UK’s offshore wind resources provides clean energy and is creating thousands of skilled jobs across the country. Offshore transmission connections are a key part of the UK’s future energy infrastructure and the European Investment Bank is pleased to support significant new investment to connect the Humber Gateway windfarm to the national network. This new scheme represents the tenth UK offshore transmission link supported by Europe’s long-term lending institution over the last five years.”