A portfolio of three UK wind farms with a combined capacity of 151MW has reached financial close after securing a £210 million ($257.7 million; €245.3 million) debt package.
Developer Banks Renewables received £140 million of the total from Macquarie Infrastructure Debt Investment Solutions, which provided long-term liquidity comprising both fixed rate and CPI-linked tranches.
The remainder was provided by ING, National Australia Bank and Rabobank in a deal arranged by Santander. The £70 million commercial debt included construction guarantee and revolving credit facilities as well as various bond facilities.
David Wadham, head of utilities at law firm Ashurst, which advised Banks Renewables on the deal, hailed the combination of institutional debt and commercial guarantee facilities in the transaction as “complex and quite unusual” for a construction project.
The three wind farms are now all set to be built by 2019 as per the conditions of their Contract for Difference subsidy. Banks Renewables secured CfDs for the 88MW Kype Muir and 51MW Middle Muir wind farms in Scotland and the 12MW Moor House site in England in the first and only auction so far for the mechanism in February 2015. Chief executive Simon Fisher said the financial backing granted to the wind trio is a vote of confidence for the beleaguered UK onshore wind industry.
“Onshore wind represents the best value renewable energy technology for UK bill payers, and it's exciting to now be accelerating the process of taking these three wind farms forward,” he said.
The next CfD round will take place in April with £290 million of government support funding to be set aside. However, onshore wind projects are due to be excluded from the auction after the government said it was looking to back “less established” renewable energy sources such as offshore wind, biomass, wave and tidal power.