Fundraising

Green Investment Bank deploys £461m in offshore wind

The UK institution has backed two renewables projects with a combined capacity of 786MW, its largest investments in offshore wind to date.

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The UK Green Investment Bank (GIB), the environment-focused lender backed by the British government, has plugged £461 million (€556 million; $767 million) of equity in the country’s offshore wind sector.

The institution is investing alongside Tokyo-listed conglomerate Marubeni to purchase a 50 percent share in the Westermost Rough offshore wind farm from Dong Energy, the Danish utility. GIB has committed £241 million to the £500 million transaction.

Located off the coast of Yorkshire, the project is currently in the early stages of construction. It will be the first wind farm to use Siemens 6 megawatts (MW) direct drive turbines – nearly double the size of typical existing turbines – on a commercial scale, and the first project in which GIB takes construction risk.

It is expected to generate more than 800 gigawatt-hours (GWh) of net electricity, which GIB says is equivalent to the power needs of 200,000 UK homes. Total investment in the project is anticipated to reach £800 million.

The bank has also acquired a 10 percent stake in the Gwynt y Môr wind farm – the largest under construction in the whole of Europe – from German utility RWE. A £2 billion project, the plant will consist of 160 turbines peppered around Liverpool Bay, off the coast of North Wales.

Gwynt y Môr, which uses Siemens 3.6 MW turbines, will have an installed capacity of 576MW once connected to the grid.

Launched in November 2012, GIB has a capital base of £3.8 billion provided by the UK government. In addition to the Westermost Rough and Gwynt y Môr projects, its offshore wind portfolio includes three operational plants. The bank has invested more than £600 million since inception.

GIB aims to help developers refinance part of their initial investment in greenfield assets to support the redeployment of fresh capital in new renewables projects. A for-profit organisation, it also intends to attract further finance in the sector by demonstrating that investments in clean energy can be made on fully commercial terms.