Project financing deal worth £59.5 million for two wind farms in UK
1 November 2004
Falck Renewables Ltd -- the UK business of the Italian Falck Group -- has signed a 15 year deal worth £59.5 million to finance two British wind farms. The combined project financing was arranged on a club basis led by Bank of Tokyo-Mitsubishi, with Barclays, HVB of Germany, and Alliance & Leicester. The money will finance Falck's 58.5 MW Cefn Croes wind farm in Wales, and the 14 MW Boyndie project in Scotland. Construction of Cefn Croes is almost complete. GE Energy is the turnkey contractor using 39 GE 1.5 MW turbines. Falck is currently negotiating the contract to build Boyndie in Aberdeenshire and hopes to begin construction in January. Output from Cefn Croes will be sold under two long term contracts from the UK's now obsolete Non-Fossil Fuel Obligation (NFFO) system of renewables support. But Boyndie does not have a power purchase agreement (PPA): it is one of very few UK projects with financing structured to accommodate merchant operation. From Falck, Charles Williams says the high degree of security afforded the banks from income from the two NFFO contracts on the much larger Cefn Croes project allows them to take a more relaxed view of any prospective volatility in income from Boyndie. "It means we are not constrained to get out and do a deal quickly for the PPA. We can take our time to either get a good long term deal, or see what the market does," says Williams.
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