EKF is part of the world’s largest offshore wind farm
With a new financing model and a guarantee of more than GBP 300 million (almost DKK three billion) EKF is participating in the financing of the world’s largest offshore wind farm, Walney Extension.
During the last two decades, EKF Denmark’s Export Credit Agency has participated in the structuring and financing of more than 100 wind farms around the world. However, let’s make it clear, not any offshore wind farm can handle the electricity demand from more than 500,000 UK homes.
When commissioned in the second half of 2018, Walney Extension off the English coast with its 87 wind turbines and a capacity of 659 MW will overtake London Array and be the world’s largest offshore wind farm. The 659 MW correspond to the electricity consumption of more than 500,000 UK households.
The impressive offshore wind farm is realised via a partnership that consolidates Denmark’s leading position in the development of wind energy. Ørsted (the former DONG Energy) is behind the construction of the impressive wind farm, and the wind turbines are supplied by MHI Vestas and Siemens Gamesa Renewable Energy.
Ørsted has recently sold 50% of the ownership of Walney Extension to a consortium consisting of PFA and PKA, two Danish pension funds. The two pension funds finance the acquisition backed by a bond issue to some of the largest institutional investors in the world. In recent years, the appetite for green investments has grown among many of the investors.
Innovative financing model
Wind parks are large and complex projects involving giant loan amounts and long tenors making it impossible for one bank alone to handle the financing. In these cases, different institutions are needed to secure financing.
In the Walney Extension project, EKF provides a guarantee of more than GBP 300 million (almost DKK three billion) for one of the bond series – a so-called green bond where the proceeds from the issuance are used to finance green investments. The green bonds are linked to the inflation in the UK, which helps reduce the financial risks in the project.
The interest in green bonds is increasing, partly because pension funds are met with customer demands for an increased focus on green investments. This is the first time that a UK offshore wind farm is financed via green bonds.
”We are definitely the leading ECA in public financing of wind farms. We are ready to break new ground in order to succeed with wind farms and to support Danish export. The solution with green bonds linked to the inflation in the UK is an example of this. At the same time, it is satisfying to know that a Danish wind partnership can help provide green energy to 500,000 British households”, says Christian Ølgaard, Deputy CEO of EKF.