Joint venture partners SSE Renewables and Equinor have reached financial close on Dogger Bank Wind Farm C, the third phase of what will be the world’s largest offshore wind farm when complete in March 2026.
SSE Renewables and Equinor are already constructing the first two phases of the 3.6GW Dogger Bank Wind Farm with Eni, joint venture partner on phases A and B of the world-leading offshore wind project to be installed off the north east coast of England. Now, with financial close being reached on the project’s third phase, Dogger Bank Wind Farm has passed the last important milestone ahead of its construction delivery programme.
Total investment in Dogger Bank Wind Farm will be around £9 billion, of which around £3 billion is for phase C including offshore transmission capex in the range of £900-1000m.
Dogger Bank C has a capacity of 1,200MW and will generate around 6TWh. In total, Dogger Bank will produce enough clean, renewable electricity to supply 5% of the UK’s demand, equivalent to powering six million UK homes.
Dogger Bank A and B is a joint venture between SSE Renewables (40%), Equinor (40%) and Eni (20%). On 2 November 2021 SSE and Equinor announced the sell down of a combined 20% share in Dogger Bank C to Eni (10% each) for a total consideration of £140m. The transaction is expected to close in Q1 2022, subject to regulatory and lenders approvals and customary purchase price adjustments. Eni will enter the asset effective from completion of the sell down transaction. Once the transaction is complete, the new overall shareholding in Dogger Bank C will be SSE Renewables (40%), Equinor (40%) and Eni (20%). Extended partner alignment will enable further synergies across, both in the construction and operations phase of the Dogger Bank wind farm.
Dogger Bank Wind Farm is pioneering new technology and breaking world records in its delivery including green financing records. Financial close on Dogger Bank C has been reached through the financing support of a group of lenders comprising 28 banks and three export credit agencies (ECAs). Taken in aggregate with the financing last year of the A and B phases of the Dogger Bank project, reaching Financial Close on all three phases of Dogger Bank Wind Farm is the largest offshore wind project financing to date globally.
Alistair Phillips-Davies, SSE Chief Executive,said:
It is a fantastic achievement to be reaching financial close on the third phase of the world’s largest offshore wind project, just weeks after COP26 concluded in Glasgow and today marks an important early milestone in the delivery of our own Net Zero Acceleration Programme. Our plans will enable delivery of over 25% of UK’s 2030 40GW offshore wind target, whilst also expanding overseas, delivering over 20% of upcoming UK electricity networks investment and deploying the critical flexibility technologies to provide security of supply.
Construction is well underway on the first two phases of Dogger Bank with work on the third phase already progressing and we look forward to this ramping up in the New Year. As well as providing clean, green power, Dogger Bank is enabling the planned GE blade manufacturing plant in Teesside and a huge number of direct and indirect jobs.
Pål Eitrheim, Equinor EVP of New Energy Solutions, said:
Reaching financial close on the third phase of Dogger Bank is a significant milestone as it demonstrates that we are on track with developing what will become the world’s largest offshore wind farm. The extensive interest from lenders underpins the attractiveness of UK offshore wind assets and the confidence in SSE and Equinor as developers. The level of interest achieved reflects the quality of the project and enables strong return on equity. As the wind farm’s future operator, we will leverage our offshore execution capability and continue to deliver value for years to come.
Dogger Bank C is being project financed with gearing of c.70% for the generation assets. Gearing on the transmission facilities is set at 90% of the forecast OFTO sale proceeds, in line with standard market practice in the sector. Total senior debt facilities is around £2.5 billion plus ancillary facilities of around £435 million.
With the strong interest from lenders, Dogger Bank C was able to secure competitive terms, despite continued impact from the coronavirus pandemic on the macroeconomic environment. The final group of lenders includes experienced lenders, many of which are relationship lenders of both SSE and Equinor. The majority of lenders are the same as for the financing of Dogger Bank A and B, reached in November 2020.
SSE Renewables is leading on the development and construction of Dogger Bank Wind Farm, and Equinor will operate the wind farm on completion for its expected operational life of around 35 years.