October 2011 saw the financial close of the largest ever project financed offshore wind farm in the world. The 400MW Global Tech 1 project is not only groundbreaking in regards to its scale but also the structure of its financing. Syndicated in just two months and seeing the first contribution from KfW Förderbank under the German offshore development plan, the project is considered to be a landmark transaction in the European renewable project finance market. Sponsors secured a total debt package of US$1,476.59 million.

The Project

Global Tech I is a 400MW offshore wind farm to be developed in the German Exclusive Economic Zone of the North Sea, 165km northwest from Bremerhaven. The project contract is for the design, construction, operation and maintenance of the wind farm.

Global Tech I is considered to be one of the most challenging renewable energy projects in the market due to its distance from the shore and water depth. The project is to be developed in an area of low shipping traffic and outside of marine reserves and is expected to have little effect on marine wildlife.

Global Tech contributes to the renewable energy target of the federal government of Germany. When fully operational, it will be capable of generating 1.4 billion kWh of electrical energy annually, supplying one million people with clean energy and it is also expected to help cut 1.2 million tons of carbon dioxide emissions each year.

The project will consist of 80 Areva Wind M500 wind turbines of 5MW, and is expected to be fully erected by 2013.

The Financing

The primary financing for the project reached financial close on 31 October 2011. The total debt is US$1,476.59 million.

Global Tech is the largest commercial offshore wind farm in Germany to be financed through non-recourse financing, and is the largest ever project financed offshore wind farm in the world. This is also the first deal to see a contribution from KfW Förderbank under the German offshore development plan. Despite its complexity, book building for the financing of Global Tech was complete in just two months. Financing covers both the construction and operation of the project.

Societe Generale acted as MLA on the deal and KfW Ipex, NordLB, Societe Generale and Dexia were joint book runners.

The debt is structured in five tranches, all with a tenor of 12 years and six months due to mature in 2024.

• Term Loan B – US$575.07 million - a €400 million EIB guarantee facility B
• Term Loan C – US$302.42 million – a €210.35 million commercial term loan facility C
• Term loan D – US$359.42 million – a €250 million KfW term loan facility D
• Contingent facility E and F – US$95.91 million – a €38.71 million contingent commercial loan facility E plus €28 million KfW facility F
• EIB Facility A – US$143.77 million – a €100 million EIB facility A

The bank lenders are as follows:

• Grupo Santander – US$59.04 million
• Deka Bank – US$59.04 million
• Societe Generale – US$71.88 million
• BTMU – US$59.04 million
• Banco Sabadell – US$59.04 million
• KfW – US$471.59 million
• DnB NOR Bank – US$59.04 million
• HSH Nordbank – US$59.04 million
• Nord LB – US$71.88 million
• ING Bank – US$59.04 million
• Natixis – US$57.5 million
• Dexia Group – US$50.32 million
• Rabobank – US$59.04 million
• Skandinaviska Enskilda Banken – US$59.04 million
• ASN Bank - US$42.15 million
• NIBC Bank - US$36.14 million
• EIB – US$143.77 million

Companies involved in the project

Project sponsors:

• Stadtwerke Munchen
• FC Windenergy
• Esportes Offshore Beteiligungs
• HEAG Sudhessische Energie
• EGL
• Windreich
• Norderland Projekt

Financial Advisers to the sponsors:

• KfW
• Société Générale
• NordLB
• Dexia Group
• Balfour Beatty

Other Advisers:

• Linklaters - Legal Adviser to the lenders
• Watson Farley & Williams - Legal Adviser
• SgurrEnergy - Technical Adviser to the lenders
• CMS - Legal Adviser to the sponsor
• Sgurr Energy - Technical Advisor
• Jardine Lloyd Thompson - Insurance Advisor