GIG and GE reach financial close on 650 MW Swedish wind farm

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GE Energy Financial Services and Green Investment Group have jointly acquired the 650 MW Markbygden ETT wind farm from Svevind and invested more than €300 million in equity to finance the wind farm. For GE, it represents GE Capital's strategy to invest in and structure financing solutions in support of GE in key global growth markets.

The sponsors' financial advisory teams sought a mix of funding from development institutions, the export-credit market and commercial banks familiar with the Nordic energy market. The project was financed on a non-recourse project financing basis with close to € 500 million in debt financing secured from European Investment Bank (EIB), Export Credit Guarantees of the Federal Republic of Germany (Hermes Cover), NordLB (acting as MLA advisor and ECA bank), KfW IPEX-Bank and HSH Nordbank.

GE and Green Investment Group originated and structured a 19-year fixed volume Power Purchase Agreement (PPA) with a subsidiary of Norsk Hydro, one of the largest aluminum producers in the world. The PPA enables Norsk Hydro to fix the price of a significant portion of the electricity demand for their Norwegian aluminum manufacturing facilities, producing approximately 100,000 tonnes of aluminum per year.

NEAS Energy (part of Centrica plc) will provide an innovative structure for the sale of Elcerts (renewable energy certificates), balancing and hedging services for Markbygden ETT. The PPA is understood to be the largest corporate wind energy PPA in the world. Furthermore, GE Renewable Energy will provide 179 of its 3.6-137 wind turbines to Markbygden ETT wind farm, currently the largest single site onshore wind installation to be delivered in Europe 

Edward Northam, Head of the Green Investment Group in Europe, said:

"This project is a landmark transaction on many fronts and represents the new frontier in European onshore wind. It demonstrates that in the right market, with the right location, the right technology and the right partners, it is possible to develop and attract private capital into new onshore wind farms."

Mark Dooley, Global Head of Green Energy, Macquarie Capital, added:

 "We are pleased to build on our strategic partnership with GE and to continue our pioneering role in the global transition towards a low-carbon economy."

Brian Ward, Head of Global Markets, GE Energy Financial Services, said:

"Markbygden ETT represents GE's unique ability to package technology and investing expertise to structure integrated off-take and financing solutions. This, combined with the depth of talent at the Green Investment Group, enabled Markbygden ETT to reach financial close in the competitive Nordic onshore wind market and achieve many market firsts."

Green Investment Group conducted a green impact assessment on the project, using the green reporting approach set out in its Green Investment Handbook.

The Markbygden ETT project was developed over 15 years by Swedish wind developer Svevind. In total, its development work in the Markbygden area may lead to 1,101 wind turbines becoming operational, in what would be the largest collection of wind farms in Europe. The project will be realized on properties owned by Sveaskog Förvaltnings AB, Sweden's largest forest owner, SCA Skogsfastigheter AB, the largest private forest holding in Europe, and several private property owners.