Barclays providing £100m loan bankrolling major forthcoming Moray West offshore wind farm

Barclays is boosting its green credentials by lending almost £100 million to a major offshore wind farm in the Moray Firth set to supply 50 per cent of Scotland’s electricity.

The bank has announced that it is providing the £95.5 million sum to power up the development of Moray West offshore wind farm, and predicted to generate enough power for up to 1.33 million homes, saving around 1.1 million tonnes of carbon dioxide emissions by the time the project completes in 2025.

Moray West, part of the Ocean Winds portfolio, has secured the capital to support the next phase of the 850-megawatt (MW) project’s construction as part of a wider syndicated £2 billion loan injection that closed in April of this year. Financial close is described as having ensured that the scheme, located 22 kilometres off the coast of the Moray Firth, can move to the next phase of supply-chain activity, with installation works due to commence later this year.

Pete Geddes, project director at Moray West, said: “The support of Barclays has contributed to Moray West reaching financial closure. This means we are now on track to commence the next phase of the project, which will see the installation of the wind farm in late 2023. Our close working relationship with Barclays has given us the support required to meet the UK and Scottish government renewable energy targets.”

The Moray West offshore wind farm is predicted to generate enough power for up to 1.33 million homes. Picture: contributed.

Barclays said it remains one of only seven banks to have supported two project-financed offshore wind farms involved in the Contract for Difference (the UK Government’s main mechanism for supporting low-carbon electricity generation and also known as CfD) allocation rounds in the UK looking to innovate with sophisticated offtake agreement strategies.

The lender, which has been criticised for its continual funding of fossil fuel projects, added that in this case it acted as a sole pre-hedge execution for the project executing interest rate, inflation and foreign exchange hedges, adding that it executed the hedges at the point the project was awarded the CfD in July 2022 and then syndicated them to the lending banks at financial close.

Innovate

Jamie Grant, managing director of Barclays Corporate Banking in Scotland, added: “Barclays’s expertise and sophisticated approach to the financing of such a major development in Scotland’s green economy reinforces our ability to support key clients in the renewables sector which look to innovate with revenue offtake strategies.

"With the commodity cost escalations that have been experienced recently, it is likely that more renewable developers will also consider innovation with their offtake strategies and we are well placed to support projects like Moray West.” The deal team was led by Neil Fleming, infrastructure and project finance director at Barclays Corporate Banking.

Ocean Winds is the joint venture owned 50/50 by Madrid-based EDPR and French multinational Engie dedicated to offshore wind, and says it is “entrenched” in the offshore wind industry in Scotland. Other projects in addition to Moray West include 950MW development Moray East; the Caledonia Offshore Wind Farm expected to be able to power up to two million households once operational in 2030; and Arven, a forthcoming floating offshore wind farm east of Shetland.

It also recently gave details of its planned financial contribution to help the community of Fraserburgh and surrounds.