EUR 2 billion interconnector in Europe gets ECAs support

1,400 MW Viking Link Interconnector between Denmark and the UK gets support from SACE Export Credit and Euler Hermes Export Credit through the first-ever multi export credit agency (ECA) covered green loan.

The US$743 million ECA-backed financing package, made up of US$488 million from SACE Export Credit and US$255 million from Euler Hermes Export Credit, was structured under National Grid’s Green Financing Framework. This is the first time multiple ECAs have come together to finance a green project of this size.

The loan, which follows the guidelines set by the Loan Market Association’s Green Loan Principles, will help fund a EUR 2 billion (USD 2.26 billion) subsea electricity cable, known as an interconnector, between the UK and Denmark. The 1400 MW cable will supply renewable energy to 1.4 million households.

Viking Link, a joint venture between National Grid and Danish system operator Energinet, is a strategic infrastructure asset for the UK and Denmark. The project has been included on the European Union list of Projects of Common Interest (PCI) which demonstrates its fundamental role in supporting the EU transition to green energy in accordance with the Paris Agreement.

Once completed in 2023, the interconnector will enable more effective use of renewable energy, access to sustainable electricity generation and improved security of electricity supply, resulting in material environmental and socioeconomic benefits for both Denmark and the UK as well as the rest of Europe.

By 2030, 90% of electricity imported via National Grid’s interconnectors will be from zero carbon sources.

The facilities are structured by BNP Paribas’ Corporate & Institutional Bank (CIB) in its role as Structuring Bank, Bookrunner, Mandated Lead Arranger and Lender of both facilities, and Euler Hermes Agent, which was joined by HSBC Bank plc as Bookrunner, MLA, Lender and Agent of the SACE Export Credit and by Natwest as Bookrunner, Mandated Lead Arranger, Lender and Facility Agent of the Euler Hermes Export Credit. The banks, SACE and SIMEST were advised by Clifford Chance, and National Grid was advised by Linklaters.