RWE and KKR Close GBP 12 Billion Financing for UK Offshore Wind Projects

en.Wedoany.com Reported - On November 11, German energy company RWE and U.S. investment firm KKR completed the equity transfer and financial close for the Vanguard West and Vanguard East offshore wind farms in the UK North Sea, with a combined planned installed capacity of approximately 2.8 GW and a total investment of approximately GBP 12 billion. KKR acquired a 50% stake in each of the two projects, forming 50:50 joint ventures with RWE. The two parties will jointly oversee project development, construction, and operation, with RWE leading engineering delivery.

The financing was provided by a syndicate of 35 international banks, comprising GBP 11.1 billion in cash financing and GBP 1.7 billion in ancillary financing facilities, totaling GBP 12.8 billion, structured as non-recourse project finance. The UK National Wealth Fund committed GBP 1 billion, providing GBP 500 million of support to each project; Euler Hermes of Germany and the Danish Export and Investment Fund (EIFO) provided credit guarantees. The financing scale sets a new record for UK offshore wind project financing.

Both wind farms are located 50 to 80 kilometers off the coast of Norfolk in eastern England, each with a planned installed capacity of approximately 1.4 GW, together capable of supplying electricity equivalent to the demand of approximately 3 million UK households. Each project plans to install 92 Vestas V236-15MW offshore wind turbines, totaling 184 units across both wind farms. Supporting works also include offshore turbine foundations, transition pieces, subsea cables, onshore transmission lines, and substation construction.

Prior to financial close, both wind farms had each been awarded 20-year contracts under the UK's seventh Contracts for Difference (AR7) allocation round, at a strike price of GBP 91.20/MWh, based on 2024 prices and adjusted for inflation. This long-term power purchase price arrangement provides a contractual basis for electricity revenue during the project operating period. On the supply chain side, Haizea Wind Group has commenced manufacturing monopile foundations for Vanguard West, Lamprell of the UAE is responsible for manufacturing 184 transition pieces across both wind farms, and Vestas has secured the turbine orders for both projects.

Currently, onshore cable construction and substation construction for both projects have made significant progress, with offshore construction planned to commence in early 2027. First foundation installation for Vanguard West is scheduled for the first half of 2027, followed by foundation installation for Vanguard East. Both wind farms are expected to be fully commissioned and operational by 2030. The UK National Wealth Fund estimates that during construction, the projects will support approximately 2,300 direct and indirect jobs per year, and will provide more than 100 long-term positions once operational.