More than 22 parties, including 12 commercial creditors, 4 public financial institutions, 1 pension fund together with Northland Power Inc. as subordinated debt lenders and the 4 members of the equity consortium were involved in the signing of the financing contracts for the Gemini offshore wind farm. Some 70 percent of this budget will be provided on the basis of project financing, making Gemini the largest-ever project financed offshore wind farm.
John Brace, CEO of Northland Power Inc ., said: “As the largest project financing to date in the offshore wind sector, today’s results demonstrate the high quality of the project and the confidence of the financial community. This confidence can be attributed to the solid structure of the project, stemming first from the Netherlands’ SDE subsidy program, and second, from the turbine supply and maintenance contracts with Siemens and the project construction contract with Van Oord, which together, provide a stable and solid investment opportunity. We are very pleased with the extraordinary effort put forth by the projects financiers, as financial close was achieved in record time for a project of this nature.”
Approximately 70% of the project’s required financing has been provided via €2 billion of “non-recourse” senior secured construction and term debt financing from twelve international commercial creditors, three export credit agencies and the European Investment Bank, which has agreed to provide EUR 587 million for the project.
This type of financing requires a strong project contract structure and entails a comprehensive due diligence process. Reflecting the strength of the project, the Gemini senior financing was oversubscribed and attracted a number of institutions that have not previously lent to the offshore wind sector. The interest rate for the project has been hedged over the full loan amortization period with an effective interest rate of approximately 4,75%.
“With project financing in place, our focus has already shifted to the construction phase,” added Matthias Haag, CEO of Gemini . “We have assembled a team of experts in the offshore wind industry, and will be working closely with Northland Power and consortium partners Van Oord, Siemens and HVC to make offshore wind power a vital and significant part of the Netherlands’ electricity supply.”
Watch the Gemini trailer: