Client stories

Dogger Bank: Financing for the world’s largest offshore wind farm

The 1.2GW Dogger Bank C phase is expected to generate around 6TWh of electricity annually and will be the first project to use GE Renewable Energy’s Haliade-X 14 MW, the first offshore wind turbine in the world to operate at 14 MW.

Dogger Bank Wind Farm will deliver clean energy to six million UK homes

With a capacity of 3.6 gigawatts (GW), Dogger Bank Wind Farm – taking its name from the large sandbank in the North Sea where it’s located – will be the largest offshore wind farm in the world. When fully completed in 2026, the wind farm will be able to produce 18 Terawatt-hours (TWh) annually – enough to supply 5% of the UK’s demand, equivalent to powering six million UK homes each year1.

The construction of the wind farm will be tackled in three phases: onshore construction began in 2020 and is currently underway for Dogger Bank A and Dogger Bank B, with offshore construction on Dogger Bank A due to begin in Q2 2022. First power is expected in Summer 2023 and Summer 2024 for Dogger Bank A and B, respectively, with commercial operations to follow around 6 months later. Onshore civil engineering and cable installation works for Dogger Bank C will start in Q1 2022, and first power is anticipated in Q3 2025 and full power in Q1 2026. Each of the three phases of Dogger Bank Wind Farm secured 15-year Contract for Difference (CfD) contracts for 1.2GW of low carbon power production in the UK Government’s third CfD Allocation Round in September 2019.

Dogger Bank A and B is a joint venture between leading developer, owner and operator of renewable energy, SSE Renewables (40%), Norwegian utility firm Equinor (40%) and Italian energy company, Eni (20%). In November 2021, SSE Renewables and Equinor, 50:50 joint venture partners in Dogger Bank C, announced Eni will take a 20% stake in the final phase, with SSE Renewables and Equinor maintaining 40% stakes each. The deal is expected to complete in Q1 2022, subject to Dogger Bank C financial close and regulatory approvals.

Located around 130 km off the north east coast of England, Dogger Bank Wind Farm, which will create almost 3,000 new UK jobs, will also make history as the first user of the largest commercially available turbine in the world, the 13MW GE Haliade-X. One rotation of its blades can power one UK home for more than two days.

NatWest structures £2.5 billion financing and advises on risk management

In order to fund the third phase of Dogger Bank, SSE Renewables and Equinor turned again to their long-standing banking partner NatWest, who had already supported the joint venture partners with the nearly £6 billion financing for phases A and B. NatWest had also been involved with both of SSE’s previous renewable deals, Seagreen, Scotland’s largest and the world’s deepest fixed bottom offshore wind farm, which will be completed in 2023, and Beatrice Offshore Wind Farm in Scotland, which started operating in 2019.

As mandated lead arranger (MLA), NatWest’s Project Finance team structured the transaction, which involved 28 banks and three export credit agencies, providing senior debt facilities of £2.5 billion and ancillary facilities of around £435 million. 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.

In addition, NatWest’s Corporate Financing & Risk Solutions and FX teams advised the wind farm owners on managing both foreign exchange and interest rate risks. As part of this role, NatWest executed FX of a total volume of £157 million. This marked the bank’s fifth FX execution role with SSE across five transactions.

Championing potential and supporting the transition to a zero-carbon economy

NatWest’s MLA role for the Dogger Bank Wind Farm financing represented the bank’s fourth such role with SSE and marked NatWest’s eleventh offshore wind project finance transaction in the UK in the past five years. NatWest has held the number 1 position2 in the renewables sector in the UK with 86 transactions between 2011-2021, totalling a volume of £4.5 billion, and after this deal will be supporting more than 10GW of offshore wind generation out of the UK’s 10.4GW of offshore capacity currently.

The transaction also highlights how NatWest delivers on our purpose to champion the potential of people, families and businesses to thrive and to support the transition to a net-zero carbon economy. The bank has pledged to provide £20 billion of Climate and Sustainable finance by 2022 and committed funding of £10 billion to the Sustainable Energy sector to help its customers, such as SSE and Equinor, to achieve their ambition of net-zero emissions by driving forward innovations in wind technology and other crucial energy infrastructure and have advised a number of customers on raising green debt to bring more electricity into the grid.

Furthermore, NatWest has pledged to make its own direct operations climate positive by 2025 and to at least halve the climate impact of our financing activity by the end of this decade.

Climate of paramount importance

Alberto Abascal, Director, Project Finance, NatWest, commented: “We’re delighted to have also supported SSE and Equinor with the financing for the third phase of Dogger Bank as well as providing risk management advice. Climate is of paramount importance to our business, our customers and the economies we operate in, and we continue to support those on their journeys as they prepare their own transition to sustainable operations.”

1 6 million UK homes powered per annum based on Typical Domestic Consumption Values (Medium Electricity Profile Class 1, 2,900kWh per household; OFGEM, January 2020) and projected total generation output of 18TWh by 3.6GW Dogger Bank Wind Farm.

2 NatWest has been the leading lender to the UK power and renewables sector over the last 10 years – by total number of transactions over that period based on the aggregated totals for the United Kingdom for the 10yr period 07/12/2020 – 07/12/2021. Source: Inframation Deals (Acuris).

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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