GIB signs deal for £1.5bn offshore wind site

The Green Investment Bank (GIB) yesterday unveiled its backing for a £1.5 billion wind farm off the Suffolk coast, its eighth deal to date in the offshore wind sector.

GIB has backed a wind farm off the Suffolk coast. Pictrure: PA

The Edinburgh and London-based bank has joined Siemens Financial Services, Macquarie Capital and German energy group RWE Innogy as 25 per cent joint equity partners in the Galloper wind farm. Although the partners haven’t detailed how much they have each committed to the project, it is thought GIB is investing around £100 million.

The joint venture has also secured £1.37bn of debt facilities from a consortium of 12 commercial banks plus the European Investment Bank (EIB), making it the UK’s first construction-ready offshore wind project finance deal.

Construction of the 336 megaWatt (mW) wind farm will start next month with around 700 jobs created during the construction phase and up to 90 in operations and maintenance once construction is complete.

The deal means the GIB has helped mobilise a total of more than £5bn in capital for offshore wind projects in the UK that will provide nearly 3,000 mW of renewable electricity generation capacity – enough to power more than 2.3 million homes in the UK.

Ed Northam, head of investment banking for GIB, said: “This is another significant milestone in the development of the UK offshore wind industry in a year that has already seen two major projects come online and construction commence on another.

“The transaction reinforces our relationship with RWE and further highlights the impressive list of companies that are investing in the sector. It is the second investment in offshore wind that GIB has made a final investment decision upon in the space of six months, demonstrating the role we continue to play in making sure that complex, but important, green infrastructure projects can proceed.”

Hans Bünting, chief executive of RWE Innogy, said: “We welcome GIB, with their experience of supporting renewables ventures and their substantial knowledge of offshore wind financing, back to another offshore partnership, their first ever equity investment being a stake in our Rhyl Flats project.

“Together with all of our partners, we look forward to utilising our collective experience and expertise to realise the successful construction of the Galloper wind farm.”

Earlier this month UK Business secretary Sajid Javid confirmed plans to remove ministerial powers over the GIB in a major step forward towards the bank’s privatisation.