Linklaters has advised a consortium of 14 banks on providing approximately £340m of non-recourse project finance facilities for Centrica, in relation to its Lynn, Inner Dowsing and Glens of Foudland wind farms. Centrica has also entered into agreement for the sale of a 50 per cent equity stake in these assets to the TCW Group for a cash consideration of £84m.
Through its subsidiary, British Gas Trading Ltd, Centrica will also enter into a 15 year Power Purchase Agreement (PPA) to off-take all the electricity production together with 50 per cent of the tradable renewable benefits generated by the three refinanced wind farms.
The Lynn and Inner Dowsing wind farms are two adjacent farms which were acquired by Centrica in December 2003, which have been built 5km off the Lincolnshire coast, east of Skegness. Together, they have an installed capacity of 194MW to provide enough power to meet the annual demand of more than 130,000 homes. The Glens of Foudland wind farm, near Huntley, in Aberdeenshire, has a capacity of 26MW, equivalent to the annual demand of a further 13,000 homes. They significantly reduce the CO2 emissions otherwise be generated from traditional power stations using fossil fuels.
The Linklaters team was led by projects partner John Pickett and managing associate Mark Cheney, assisted by managing associate Julian Gratiaen and associates Siobhan Carlin, Marina Tinning and Rachel Morse. The team worked very closely with Siobhan Smyth from the lead documentation bank, HSBC plc., and with Centrica, to steer a large bank group through this ground-breaking transaction.
The full consortium of banks was made up of: Bank of Ireland, Bank of Tokyo-Mitsubishi UFJ, Bayern LB, BBVA, BNP Paribas Fortis, Calyon, Dexia, HSBC Bank PLC, KfW IPEX Bank, Lloyds TSB Corporate Markets, National Australia Bank, NIBC Bank N.V., RaboBank, Santander.
Other parties included The Bank of Tokyo-Mitsubishi UFJ, Ltd., who advised Centrica on the financing.
John Pickett, Linklaters projects partner, said:
"It is extremely pleasing to have assisted the lead arrangers and Centrica in this significant deal, particularly in the current market. This is a significant financing for the sector, blazing a trail for the offshore wind market at a time of huge capital requirements for the sector. We hope that this creates a valuable precedent for Centrica in developing their offshore portfolio, and proves an inspiration for others."
For further information, please contact:
Rupert Winlaw on +44 20 7456 3219 or rupert.winlaw@linklaters.com
Sarah Peters on +44 (0)20 7456 2153 or sarah.peters@linklaters.com
