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Case study

NatWest advises Ørsted on second German offshore wind financing

Subsidised 253MW Wind Farm in Germany to generate clean energy for more than 250,000 households

Amongst the world’s most sustainable energy companies

Headquartered in Denmark, Ørsted develops, constructs, and operates offshore and onshore wind farms, solar farms, energy storage facilities, renewable hydrogen and green fuels facilities, and bioenergy plants. 

Ørsted has been ranked amongst the world’s most sustainable energy companies in the Corporate Knights Global 100 Index since 2019 and is recognised on the CDP Climate Change A List as a global leader on climate action. It is also the only energy company in the world with a science-based net-zero target, as validated by the Science Based Targets initiative (SBTi), that’s aiming for net-zero emissions across its full value chain by 2040, and is on track to be carbon-neutral in energy generation and operations by 2025. 

This year, Ørsted began construction of Gode Wind 3, a 253MW offshore Wind Farm located in the German North Sea, that will generate clean energy for more than 250,000 households. The site of Gode Wind 3 – expected to be fully commissioned in the second half of 2024 – is situated in close proximity to the already operational Ørsted sites, Borkum Riffgrund 1 and 2, and Gode Wind 1 and 2, as well as the 900MW Borkum Riffgrund 3 which is currently under construction. 

Gode Wind 3 benefits from a subsidy provided by the German government, whereby the Wind Farm will be entitled to top-up payments should the monthly average wind capture prices fall below an agreed floor strike price. 

Phased approach to lenders secures strong financing package

Ørsted has decided to divest a 50% stake in Gode Wind 3 to Glennmont Partners by Nuveen, and thereby extend their existing partnership in Germany. Glennmont is one of Europe’s largest fund managers investing in clean energy infrastructure, and is already partnered with Ørsted in Gode Wind 1 and Borkum Riffgrund 3.

Ørsted arranged the financing package for Glennmont's acquisition of 50% interest in Gode Wind 3, and engaged NatWest for support – based both on our capabilities in offshore wind financing, and that we’d supported Ørsted with several transactions in the past, including advising on the debt financing for the landmark 900MW Borkum Riffgrund 3 site. A €400m debt financing package was sought to support the ongoing construction of the Wind Farm.

As Sole Financial Advisor, we approached a select group of lenders to participate in the €400 million debt financing package for Gode Wind 3. Given the subsidised nature of the transaction and strong credit fundamentals, the transaction was heavily oversubscribed, confirming that there continues to be strong liquidity for offshore wind projects despite market volatility and recent challenges in the offshore wind sector. Commitments were secured from 10 lenders at precedent setting terms and pricing for under construction offshore wind assets in Europe. 

Continuing to support the renewables sector a key part of NatWest’s funding

Alberto Abascal, NatWest, said: “We are delighted to have been able to support Ørsted as Sole Financial Advisor on the debt financing for this transaction. Combined, NatWest has advised and achieved financial close on the debt financing for 1.15GW in offshore capacity over the last two years, which demonstrates both our expertise in this sector and our commitment to playing an active role in the transition to a net-zero carbon economy. This deal aligns with our target to provide £100 billion of climate and sustainable funding by the end of 2025.”

 

The information provided in this article has been prepared by National Westminster Bank Plc (NatWest) for information purposes only and is subject to change from time to time. The information and views expressed should not be treated as advice or a recommendation of any kind. NatWest makes no representation, warranty, undertaking or assurance of any kind (express or implied) with respect to the adequacy, accuracy, completeness, or reasonableness of the information provided and disclaims all liability for any use you, your affiliates, connected companies, employees, or your advisers make of it. NatWest accepts no liability whatsoever for any direct, indirect, or consequential losses (in contract, tort or otherwise) arising from the use of this material or reliance on the information contained herein. However, this shall not restrict, exclude, or limit any duty or liability to any person under any applicable laws or regulations of any jurisdiction which may not be lawfully disclaimed.

 

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