German developer and financier WPD has reached financial close for its Havelland wind farm project at the end of 2004 – the largest such renewable project to close in the country to date, writes Angus Leslie Melville.

The wind farm includes six separate wind farms with 64 Enercon 2MW turbines. Construction for the first turbines – 15 turbines in the first instance – of the €160m (US$207m) project has already started and completion of the whole project is slated for 2006. Energy production is forecast at 280GWh/a – providing electricity for some 70,000 households.

The developers’ consortium includes Bremen-based WPD, and two partners, mdp and Wiemken. Senior debt of €143m (US$185m) was arranged by Bremer Landesbank – one of Germany’s leading wind farm project finance banks. The arrangers included KfW, Nord LB, LRP and HELABA.

In a statement by the joint-chief executives – Gernot Blanke and Klaus Meier – issued at the closing of the deal, they said that ‘financing was arranged in six months and this is a big step for WPD as co-developer and partner for projects in Germany and worldwide’.

Meier says this latest project sees WPD consolidate its strong role in the market. He says: ‘The outlook for the new year is extremely positive – we will exceed the 120MW commissioned in 2004.’

On the last year’s operations, Blanke adds: ‘As regards investments, €193m was attained in 2004, thus exceeding previous year's figure by about 20 per cent. The success shown by the numbers expressed itself in further solidifying WPD's market leadership in equity syndication. In this field, we were able to increase our results by 20 per cent – €54.5m.’

While wind power remains WPD’s cornerstone and will do so in years to come, the company is looking to expand its photovoltaic and biomass involvement in Germany’s bid to hit its targets of 12.5 per cent of power from renewable sources by 2010, 20 per cent by 2020.

Blanke says: ‘In the next years, Germany will continue to be one of the most important markets world wide, if not the most important market, even if annual commission is expected to peak at 1,500MW. We expect to take 8-10 per cent of the market – as in 2004.’

Meier – pointing to the recent opening of an office in London – says: ‘Apart from international project finance, we are see interesting perspectives for the Baltic and North Sea offshore projects currently being developed by WPD. Financing projects of this magnitude will require cooperation with major banks.’

Transaction

WPD together with two regional engineering and developing companies mandated Bremer Landesbank as agent and lead arranger on the 15-year financing of the wind farm project.

KfW IPEX-Bank, NORD LB, HELABA and Landesbank Rheinland-Pfalz joined Bremer Landesbank in the transaction, acting as arrangers.

The €143m non-recourse loan will be used for the construction of at least 65 Enercon 2MW wind turbines on neighbouring sites in Havelland county, located west of Berlin. With 130 MW, Havelland is the country’s largest wind power project to date.

The transaction was completed in December 2004. The construction period is scheduled for 2005 and 2006 for the two construction phases. The sponsors are committed to a long term operation and ownership of the wind farm.

A power purchase agreement of 20 years has already been signed with Vattenfall.