The sponsors of the €200 million ($217.3 million) 102MW Krammer onshore wind project in the Netherlands concluded its financing in March 2017.

To do so, they used a number of lesser-used techniques for projects of this type: including local cooperatives as the major shareholders in the equity group; and signing an offtake agreement with a quartet of corporates in a power purchase agreement which has already been replicated for another Dutch project.

Long time coming

Launched in 2010, the wind farm eventually reached financial close in March 2017. Set on narrow breakwaters, the site is also close to a breeding ground for birds and experiences storm seasons. This leads to a limited time window for construction, as development will be spread over at least two of these seasons. Though the area’s stormy weather makes construction more challenging, it will also provide excellent wind resource for the completed project. 

The project is being developed by Dutch energy cooperatives Deltawind and Windmill, as well as German turbine manufacturer Enercon. The two cooperatives have more than 4,000 members resident in the Goeree-Overflakke island region of the Netherlands, and together have a 51% stake in the project. Enercon owns the remaining 49% equity holding. The equity cooperative is thought to be the largest citizen-led cooperative in the Netherlands.

IJGlobal reported that debt raising had begun for Krammer in September 2016. Four months later, four banks were mandated to finance the project.

The sponsor initially approached Dutch banks for the deal, IJGlobal understood at the time. At financial close, the final project cost was €200 million, the sponsors said, an upwards revision of the €190 million previously reported.

In the end, ASN Bank, ING Bank, Rabobank and SMBC lent on the deal. The debt carries a construction-plus-15-year tenor, the sponsors said.

Big business offtakers

AkzoNobel, DSM, Google and Philips will jointly buy electricity from the plant to power part of their operations in the Netherlands once it becomes operational in 2019.

Corporate PPAs have risen in prominence with the rise of big businesses seeking green power for their operations. IJGlobal data shows major growth in European corporate PPA activity over the past year – from 27.8MW of capacity signed in 2015 to 1.32GW in 2016.

The deal works well for all parties: the PPA guarantees a buyer of power for the sponsors, while the corporates get to negotiate their own power prices and supply off-grid.

The same corporate group said in January 2017 that it had decided to work together again to offtake more wind power in the Netherlands, signing a PPA to buy all the power from the in-construction 33MW Bouwdokken wind farm on the ‘Neeltje Jans’ artificial island.

The Krammer project is supported by backing not just from corporates but also with the state. A contract is in place as of July 2016 with Dutch transmission system operator TenneT for a grid connection for the project, which is expected to built by the end of 2017. The project is also understood to have qualified for the Dutch SDE subsidy regime under a 2015 application round.　

Looking ahead

The Netherlands looks likely to have strong potential for other developers looking to build onshore wind. The country had approximately 3.43GW of installed onshore wind capacity as of the end of 2015, but it has a target of almost double that - 6GW - to be installed by 2020.

Krammer had already started construction in October 2016, pre-close, and is expected to be completed by 2019. Enercon, ABB, GMB and Alsema are the primary contractors for the 34-turbine wind farm, which will be built in and around the Krammersluizen dam in the south west of the country.

The equity holders had wanted to sell shareholdings in the project in the fourth quarter of 2016, but plans for this appear to have been put on hold. A 14 December 2016 statement on the project company website said the sponsors are working on "an alternative model" for the stake sale.

Baker & McKenzie advised the power offtakers on the deal. Blix Consultancy advised the project sponsors.