Global Infrastructure Partners (GIP) has secured nearly £370m in long-term financing from LGIM Real Assets (LGIM RA) to support its acquisition of 50% stake in Hornsea 1 offshore wind farm.
In September, Danish energy giant Orsted agreed to sell 50% stake in the 1,218MW MW Hornsea 1 offshore wind farm to GIP for £4.46bn ($5.86bn).
The total transaction amount includes the acquisition cost of 50% stake in offshore wind farm and commitment to fund 50% of the payments under the engineering, procurement and construction (EPC) contract for the entire wind farm.
Under the terms of the agreement, GIP will pay the acquisition amount between 2018 and 2020. The firm planned to partly fund the acquisition through a multi-tranche financing package of over £3.5bn.
LGIM RA has offering the financing to GIP on behalf of its clients, including Legal & General Retirement Institutional (LGRI).
LGIM Real Assets’ infrastructure debt senior investment manager Charles-Henry Lecointe said: “This deal represents our second offshore wind investment for LGIM clients, and our largest single investment into the renewable sector to date.
“We recognise the importance of the offshore wind industry and the vital role it plays in providing clean energy and stimulating job growth in the UK. Legal & General’s investment in the world’s largest offshore wind farm is testament to our continued focus in the renewables sector.”
Over the past 12 months, LGIM RA has made major investments in the UK renewables sector, including £320m of debt financing for the Walney Extension, which is currently one of the world’s largest offshore wind farms.
GIP also holds 50% stake in Orsted’s German offshore wind farms, Gode Wind 1 and Borkum Riffgrund 2.
Located in the North Sea 120km from the UK east coast, the Hornsea 1 offshore wind farm will consists of 174 wind turbines supplied by Siemens Gamesa.
The wind farm, which is expected to be fully commissioned in 2020, will produce enough electricity to power more than one million UK homes, while offsetting 1.7 million tonnes of CO2 from entering the atmosphere.