european offshore wind investment update

Data Insight Report
December
November
2014
October
2014
EUROPEAN OFFSHORE
EuropEan
offshorE WIND
Wind INVESTMENT
invEstmEnt UPDATE
updatE
Sponsored by
Europe, Project finance, Wind, Offshore wind
This Data Insight Report, sponsored by Crowe Clark Whitehill, analyses investment activity in Europe’s
offshore wind sector in the first three quarters of 2014. The analysis is based on M&A and project
finance transactions tracked by Clean Energy Pipeline’s deal data team.
divEstmEnts of EuropEan offshorE Wind farms by projEct status
EffEctivE capacity
158MW
275MW
2013
999MW
Divestments of offshore wind farms at the pre-operating stage
were particularly active. Sponsors divested 756MW of effective
offshore wind capacity at the pre-operating stage in the first
three quarters of 2014, compared with 724MW in 2013 and
430MW during the entirety of 2010-2012.
Copyright © 2005-2014 VB/Research Ltd.
Construction
593MW
Pre-construction
divEstmEnts of EuropEan offshorE Wind farms
EffEctivE capacity
1,000
12
11
800
19
9
18
8
600
17
7
400
16
1
3
20
11
0
Nysted - 166MW (Denmark)
Walney - 367MW (UK)
Gunfleet Sands - 172MW (UK)
Anholt - 400MW (Denmark)
Borkum Riffgrund 1 - 277MW (Germany)
Gemini - 600MW (Netherlands)
Butendiek - 288MW (Germany)
Luchterduinen - 129MW (Netherlands)
Northwind - 216MW (Belgium)
Rödsand II - 207MW (Germany)
15
6
5
13
11
12
13
14
15
16
17
18
19
20
14
D)
4
2
20
1
(Y 4
T
200
1
2
3
4
5
6
7
8
9
10
20
10
20
10
Utilities are divesting stakes in offshore wind farms to bolster
their balance sheets, which are becoming increasingly
stretched following significant earnings decreases. For
example, E.ON, Germany’s largest utility, generated a net
income of €2.2 billion in 2013, a 46% annual decrease.
Meanwhile RWE, Germany’s second largest utility, reported a
€2.8 billion net loss in 2013 compared with €1.3 billion net
profit in 2012. For many utilities across Europe, profits are
falling rapidly due to significant declines in wholesale power
prices, which is a direct result of the expansion of renewable
energy on the grid. ►
914MW
Source: Clean Energy Pipeline
EFFECTIVE CAPACITY (MW)
Vattenfall and DONG Energy have also executed notable
divestments of offshore wind farms in 2014. In June 2014,
Vattenfall sold a 49% stake in the 252MW Gode Wind II
offshore wind farm to Stadtwerke Munchen. The project is
estimated to cost €1.2 billion to build. Construction is expected
to commence in 2015 with commercial operation scheduled
for 2016. A month later, DONG Energy divested a 50% stake in
its 252MW Gode Wind II offshore wind farm in Germany to a
group of pension funds comprising PKA (24.75%), Industriens
Pension (10.5%), Lærernes Pension (8.75%), and Lægernes
Pensionskasse (6%).
2014 (YTD)
135MW
Operating
The largest divestment in 2014 thus far is German utility RWE’s
sale of its 85% stake in the 332MW Nordsee 1 offshore wind
farm in Germany to Canadian IPP Northland Power in September
2014. Financial close is anticipated in the first half of 2015.
163MW
589MW
20
13
(MW)
megawatts
Sponsors announced the sale of 914
914MW
megawatt
of effective
(MW)
offshore
ofofeffective
wind as
capacity,
defined
capacity
effective
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wind
offshore
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defined
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as
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inofthe
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first three
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is the
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999MW
999MW
divested
divested
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in but
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divested
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but
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thein139MW
considerably
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more
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the 139MW
the 139MW
transacted
transacted
2012.
in 2012.
Clean
expects
the
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transacted
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2012.
Clean
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Clean
Energy
Pipeline
expects
expects
theEnergy
volume
the Pipeline
volume
of divestments
of
divestments
to exceed
to
toyear.
exceed
2013 levels this year.
of divestments
2013
exceed
levels
2013this
levels
this year.
20
12
UTILITIES accElEratE
ACCELERATE DIVESTMENTS
utilitiEs
divEstmEnts OF
of OFFSHORE
offshorE WIND
Wind PROJECTS
projEcts
Belwind 1 - 165MW (Belgium)
Rhyl Flats - 90MW (UK)
Gemini - 600MW (Netherlands)
Butendiek - 288MW (Germany)
Nordsee 1 - 332MW (Germany)
Gode Wind II - 252MW (Germany)
Sandbank - 288MW (Germany)
Westermost Rough - 210MW (UK)
Gwent y Môr - 576MW (UK)
London Array - 630MW (UK)
Source: Clean Energy Pipeline
All content (including data, analytics, presentations, tables, graphs, quotes) are the property of VB/Research Ltd and are protected by
copyright. This content can be used for business or personal use and must be credited to Clean Energy pipeline VB/Research Ltd.
Data Insight Report
Project debt finance reaches new heights in 2014
Project debt finance transactions in Europe
Export credit agencies (ECAs) and multilateral finance
organisations are vital sources of finance for offshore wind
projects. All three projects that secured debt finance in
2014 were supported by these institutions. In May 2014, the
European Investment Bank (EIB) and three ECAs – Denmark’s
Eksport Kredit Fonden, Germany’s Euler Hermes and Belgium’s
Delcredere/Ducroire – provided some €1.1 billion ($1.5 billion)
of non-recourse senior debt to the Gemini project.
Two months later, Eksport Kredit Fonden participated in the €400
million ($550 million) financing of the 144MW Westermeerwind
offshore wind farm in the Netherlands by guaranteeing part of the
5
4
3
18
9
2
12
15
8
10
14
7
20
11
09
20
08
20
07
20
06
3
2
20
10
1
0
Princess Amalia - 120MW
Thornton Bank (C-Power) Phase 1 - 30MW
Lynn and Inner Dowsing wind farms - 194MW
Bligh Bank Phase I (Belwind) -165MW
Thornton Bank (C-Power) Phases 2 & 3 - 295.2MW
Borkum West II - 200MW
Baltic 1 - 48.3MW
Meerwind - 288MW
Global Tech 1 - 400MW
10
11
12
13
14
15
16
17
18
17
11
20
13
5
16
20
14
4
20
12
1
1
2
3
4
5
6
7
8
9
13
6
20
The Gemini transaction highlights the extent to which
commercial banks are now comfortable with lending to offshore
wind farms. In total, more than 40 commercial banks have
invested in the European offshore wind sector since 2006.
Five institutions invested in the sector for the first time in
2014. These are Bank of Montreal, CIBC, Bank Nederlandse
Gemeenten and CaixaBank, which were among the 12
commercial banks supporting the Gemini project, and Triodos
Bank, which invested in the 144MW Westermeerwind near-shore
wind farm in the Netherlands.
2006 - 2014
DEAL VALUE ($ BILLION)
Three European offshore wind farms secured $4.1 billion
of debt project finance in the first three quarters of 2014, a
2.5x increase on the $1.6 billion invested in 2013. This year
is already the largest on record for offshore wind project debt
finance. Much of the increase was due to the €2.2 billion
($3 billion) debt package to support construction of the €2.8
billion ($3.9 billion) 600MW Gemini project in the Netherlands.
The financing agreements were signed in May 2014. This is the
world’s largest renewable energy project to be funded using nonrecourse project finance.
Walney - 367MW
Lincs - 270MW
Northwind - 216MW
Gunfleet Sands - 172.8MW
London Array - 630 MW
Butendiek - 288MW
Westermost Rough - 210MW
Westermeerwind - 144MW
Gemini - 600MW
Source: Clean Energy Pipeline
€320 million ($440 million) commercial bank debt provided by
ING, Rabobank, ASN Bank and Triodos Bank.
In August 2014, Japan Bank of International Cooperation joined
The Bank of Tokyo-Mitsubishi UFJ, Mizuho Bank, Siemens
Financial Services and Societe Generale in providing £375
million ($623 million) to refinance part of Marubeni and the UK
Green Investment Bank’s 50% stake in the 210MW Westermost
Rough project in the UK.
Divestments of European offshore wind farms in 2014 (YTD)
Date
announced
Project
Stake
acquired
Stage of asset
when acquired
Effective
capacity
acquired
Equity investors
Vendor
Deal value
Sep-14
Nordsee 1
332MW (Germany)
85%
Pre-construction
282MW
Northland Power
RWE Innogy
Undisclosed
Jul-14
Gode Wind II
252MW (Germany)
50%
Pre-construction
126MW
PKA (24.75%), Industriens Pension
(10.5%), Lærernes Pension (8.75%),
Lægernes Pensionskasse (6%)
DONG Energy
€600m
($821m)
Jun-14
Sandbank
288MW (Germany)
49%
Pre-construction
141MW
Stadtwerke Munchen
Vattenfall
Undisclosed
Mar-14
Westermost Rough
210MW (UK)
50%
Construction
105MW
UK Green Investment Bank (25%),
Marubeni (25%)
DONG Energy
£240m
($400m)
Mar-14
Gwent y Môr
576MW (UK)
10%
Construction
57.6MW
UK Green Investment Bank
RWE Innogy
£220m
($366m)
Jan-14
London Array
630MW (UK)
25%
Operating
157.5MW
Caisse de dépôt et placement du
Québec
DONG Energy
£644m
($1,063m)
Jan-14
Gemini
600MW (Netherlands)
5%
Pre-construction
30MW
Northland Power
Typhoon Offshore
Undisclosed
Jan-14
Butendiek
288MW (Germany)
5%
Pre-construction
14.4MW
Elektrizitaetswerk der Stadt Zuerich
(EWZ)
WPD
Undisclosed
Source: Clean Energy Pipeline
Copyright © 2005-2014 VB/Research Ltd.
All content (including data, analytics, presentations, tables, graphs, quotes) are the property of VB/Research Ltd and are protected by
copyright. This content can be used for business or personal use and must be credited to Clean Energy pipeline VB/Research Ltd.
Data Insight Report
Offshore wind project debt finance transactions in Europe in 2014 (YTD)
Financing
date
Project
Owners
Debt providers
Financing type
Debt financing
secured
Aug-14
Westermost Rough
210MW (UK)
DONG Energy (50%), Marubeni
Corp (25%), UK Green Investment
Bank (25%)
Bank of Tokyo-Mitsubishi UFJ,
Mizuho Bank, Siemens Financial Services, Societe Generale, Japan Bank
for International Cooperation
Refinancing of
part of Marubeni
and the UK
Green Investment
Bank's 50% stake
in the project
£370m
($623m)
Jul-14
Westermeerwind
144MW (Netherlands)
Westermeerwind BV (100%)
ASN Bank, ING, Rabobank, Triodos
Bank
Non-recourse
project financing
(pre-construction
stage)
€320m
($440m)
May-14
Gemini
600MW (Netherlands)
Northland Power (60%), Siemens
Financial Services (20%), Van
Oord Dredging and Marine Contractors (10%), HVC (10%)
ABN AMRO Bank, BNP Paribas, Bank
of Tokyo-Mitsubishi UFJ, Deutsche
Bank, Export Development Canada,
Natixis, Sumitomo Mitsui Banking
Corporation, Bank of Montreal, CIBC,
Bank Nederlandse Gemeenten,
Banco Santander, CaixaBank, EKF,
Euler Hermes, Delcredere/Ducroire,
EIB, PKA
Non-recourse
project financing
(pre-construction
stage)
€2,200m
($3,000m)
Source: Clean Energy Pipeline
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