WFW advises EFK on 1.2 GW UK offshore wind project acquisition financing

Watson Farley & Williams has advised Danish export credit agency EKF Danmarks Eksportkredit on its provision of guarantees to commercial and institutional lenders on a £3.5bn (US$4.5 billion) + multi-tranche financing package to Global Infrastructure Partners (GIP) for the acquisition of a 50% stake in Ørsted’s 1.2 GW Hornsea One offshore windfarm.

The financing, for which EKF is providing two separate guarantees for different tranches of the package, comprises a combination of institutional-backed project bonds, commercial bank loans and a mezzanine tranche from Danish pension fund PFA. The total sales price for the transaction is approx. £4.46bn (US$5.7 bn), to be paid until 2020, and includes both the acquisition of GIP’s 50% ownership share and a commitment on its part to fund 50% of the payments under the EPC contract for the entire project, including transmission assets.

The project involves the installation of 174 7 MW Siemens Gamesa turbines ​in a 407km² area within the Hornsea zone of the North Sea, located around 120km from the east coast of England. It will generate enough electricity to power more than one million UK homes.

The wind farm will connect to the grid through HVAC export cables that make landfall at Horsehoe Point and run approximately 38km to an onshore substation at North Killingholme in Lincolnshire.