Dogger Bank Wind Farm in the North Sea is expected to become the world’s largest offshore wind farm. On completion, it will be capable of powering 6 million typical UK homes.
Export financing of large multinational projects isn’t just for developing economies. Under certain conditions, it works just as well in reducing risk for commercial lenders in mature economies. One example is Dogger Bank Wind Farm in the North Sea, where EKN is contributing by providing guarantees for the financing of the purchases from the Swedish suppliers Hitachi ABB Power Grids and NKT for the first two phases.
EKN allowed us to optimise our financing structure and meet the financing timelines we’d set out to achieve.
Oliver Cass, Project Finance Director at Dogger Bank
It is important to promote this type of export transaction. Our Swedish exporters, Hitachi ABB Power Grids and NKT, deliver proven and advanced technology to manage the challenges posed by the long distance to land. The transaction is also fully aligned with EKN’s ambition to be a positive force in the climate transition and contribute to reduced emissions of greenhouse gases, says Marie Aglert, Director of Business Area for Large Corporates, EKN.
130 km from the coast
Dogger Bank Wind Farm is being constructed in the North Sea, more than 130 km from the Yorkshire Coast and comprises a joint venture between the UK energy company SSE Renewables and the Norwegian energy group Equinor. Dogger Bank encompasses three phases. The first two (Dogger bank A and B), to which the financing pertains, are being built in parallel.
Upon completion, each phase will have an installed capacity of 1.2 GW, where the Swedish deliveries will comprise HVDC converter stations from Hitachi ABB Power Grids and a total of just over 800 km of high-voltage power cable from NKT. Together, the deliveries comprise a groundbreaking HVDC technology solution enabling electricity transmission with low losses, even for wind power far offshore. General Electric is delivering the wind turbines. The total investment amounts to around GBP 6 billion for the first two phases. The total debt of GBP 5.5 billion represents in aggregate the largest offshore wind project financing to date globally.
Optimised our financing structure
“With the quantum of funding required, the wind farm being the first in the UK to use a HVDC connection and installing new turbine technology for the first time globally, the ECAs were always going to be important partners for the project’s financing,” says Project Finance Director Oliver Cass and continues: “EKN engaged actively and constructively with the project from an early stage and provided clarity on the level of cover that could be achieved and the terms of their participation. This allowed us to optimise our financing structure and meet the financing timelines we’d set out to achieve.”
The first phase, Dogger Bank A, is expected to be operational in 2023. The overall wind farm is expected to be complete in 2026.
* 6 million UK homes powered per annum based on Typical Domestic Consumption Values (Medium Electricity Profile Class 1, 2,900kWh per household; OFGEM, January 2020) and projected total generation output of 18TWh by 3.6GW Dogger Bank Wind Farm.