SSE and Equinor have reached financial close on the first two phases of one the world’s largest offshore wind farms now that 29 UK, French and Japanese banks, plus three export credit agencies from across Europe have backed the 2400MW Dogger Bank A & B offshore wind farm off England's north-east coast.
Capital expenditure for the first two phases will total about £6 billion (€6.7 billion), including offshore transmission Capex of about £800 million for each phase.
The developers described the finance package as the "largest offshore wind project financing" ever.
“Reaching financial close on the two first phases of Dogger Bank is a major milestone, demonstrating our commitment to profitable growth within offshore wind," said Pål Eitrheim, Equinor’s executive vice president of the Norwegian oil major's New Energy Solutions division.
"The extensive interest from lenders underpins the attractiveness of UK offshore wind assets and confidence in SSE and Equinor.”
Dogger Bank will consist of three 1.2GW phases, with the first two due to be built simultaneously to take advantage of the synergies resulting from their proximity and use of common technology and contractors.
Total senior debt facilities across the first two phases is £4.8 billion, plus ancillary facilities of about £700 million, the developers stated.
Project financing of the first two phases’ generation assets will have a debt-to-equity ratio – known as gearing — of 65-70% for the generation assets.
The developers expect the debt-to-equity ratio to be more than 90% for the transmission assets, subject to sale proceeds of offshore transmission ownership (OFTO) rights.
They had previously secured 15-year contracts for difference worth £39.65/MWh for the first phase, and £41.61/MWh for the second and third phases, in 2012 prices, in the UK’s tender last year.
Ørsted will be responsible for trading 40% of the first two phases’ output, while Shell, Danske Commodities and SSE will each be responsible for trading 20%.
The first phase is due to be commissioned in 2023 or 2024, with the final two phases due online in 2024 or 2025.
SSE and Equinor expect the entire 3.6GW complex to be able to produce 18TWh — enough to power the equivalent of six million UK homes each year and supply 5% of the uK’s electricity demand.