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Dudgeon wind farm secures GBP1.3 billion project financing

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13 May 2016

The developers of one of the world’s largest offshore wind farms announced the limited recourse financing for the project today, having reached financial close in six months.

Allen & Overy’s role was advising the Mandated Lead Arrangers on the GBP1.3 billion long-term financing which will fund the capital requirements of the 402-megawatt (MW) Dudgeon Offshore Wind Farm, currently under construction 32 kilometres out to sea from the North Norfolk coast of East England.

Chris Andrew, lead A&O partner on the deal said: “This is a landmark transaction as it’s the first UK offshore wind project to obtain financing under the UK government’s new ‘Contract for Difference’ regime. Detailed preparatory work meant financing on this project was nevertheless executed very quickly.”

Dudgeon is being developed by the Norwegian oil & gas company Statoil (35%), Abu Dhabi’s renewable energy company Masdar (35%), and Norway’s state-owned electricity company Statkraft (30%). Statkraft and Statoil are also participating in the financing through sponsor co-lending. Statkraft will finance its 30% share in the project, while Statoil will finance a share of 17.5%.

“Closing such a significant phase of the project’s development so swiftly illustrates the energy industry’s confidence in the long-term potential of offshore wind, and the increasing sophistication of financing models available to the sector,” said Halfdan Brustad, Chairman of Dudgeon Offshore Wind Limited. “It is also a testament to the project’s commercial competitiveness, smooth execution, and the growing investor appetite for utility-scale renewable energy.”

Brustad added: “Dudgeon demonstrates the willingness of its developers to support the ongoing growth of the UK green economy. The project benefits the UK’s offshore wind industry; at least 70 local jobs are created directly in the operations phase, additional jobs during construction and indirectly in the supply chain. More than 50% of the construction cost is anticipated to be spent in the UK supply chain.”

The Mandated Lead Arrangers comprise The Bank of Tokyo-Mitsubishi UFJ, Ltd.; BNP Paribas Fortis SA/NV; Crédit Agricole Corporate and Investment Bank; KfW IPEX-Bank GmbH; Mizuho Bank, Ltd.; Abbey National Treasury Services plc (trading as Santander Global Corporate Banking); Siemens Bank GmbH, London Branch; Société Générale, London Branch; and Sumitomo Mitsui Banking Corporation.

The advisory group included legal advisors A&O and Linklaters, financial advisors Société Générale Corporate & Investment Banking, technical advisors SgurrEnergy, and insurance advisors Aon and Willis. Crédit Agricole Corporate and Investment Bank acted as the documentation bank.

The A&O team was led by Chris Andrew and included partner Sheila Connell, senior associate Graham Knight, associates Bruce Chen, Tim Stanton, Alex Collins and Als Scrope, with support from Sandipan De and Thomas Maddin.

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