EIB Offer Largest Ever Loan for Windfarm

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The European Investment Bank (EIB) has agreed to support the construction of the Beatrice windfarm in Scotland. The £525 million loan is record breaking – it is the single largest investment for an offshore wind project the EIB has ever supported. Construction of the windfarm will begin next year.

The Beatrice windfarm is to be built 14 km off the Caithness coast, near Wick in north-east Scotland. It is the first project in Scotland to be supported by the new European Fund for Strategic Investments (EFSI), the heart of the Investment Plan for Europe, intended to generate EUR 315 billion of new investment across Europe.

Paul Cooley, Director of Renewables at SSE, said: “We are delighted that Beatrice has achieved financial close and we are extremely grateful for all of the support received throughout the development of the project from stakeholders such as the Scottish Government, DECC, HIE, the Highland Council, Moray Council and local communities. Contracts have already been placed with many UK based suppliers, and Siemens intend to undertake turbine blade construction from Siemen’s new manufacturing facility in Hull.

“Today’s decision reaffirms SSE’s commitment to offshore wind and we are proud to progress such a flagship project for the Scottish offshore wind industry and the UK’s skilled supply chain. It shows SSE will continue to play its part in investing in the critical energy infrastructure the country needs to power homes across the UK both today and in the future.

“Around £10 million of investment is planned at Wick Harbour to house the wind farm’s operations and maintenance facilities and improving the existing RNLI facilities. We expect a peak of around 65 jobs during construction of the Operations and Maintenance base with around 90 long-term jobs anticipated during the operational phase.”

The 86 turbine Beatrice windfarm will generate up to 588 megawatts (MW) of renewable electricity equivalent to the energy needs of more than 475 thousand homes and is expected to be fully operational in 2019.

The new wind farm will cost more than £2.7 billion and be built by Beatrice Offshore Windfarm Limited, a partnership formed between SSE, SDIC Power and Copenhagen Infrastructure Partners. Construction and operation of the Beatrice windfarm will support job creation, skills training opportunities and opportunities for local businesses in both the Moray and Highland regions of Scotland.

Jonathan Taylor, Vice President at European Investment Bank, said: “Investment in offshore wind is crucial to harnessing the full potential of Scotland’s renewable energy resources. The European Investment Bank is one of the world’s largest lenders for renewable energy and our backing for Beatrice represents the EIB’s largest ever support for offshore wind investment. We are pleased to provide £525 million to support construction of the Beatrice windfarm that will strengthen renewable energy generation in Scotland. This also represents the first Scottish scheme to be backed by the new European Fund for Strategic Investments. EIB backing for energy investment across the UK demonstrates our firm commitment to supporting ambitious energy projects that create jobs and benefit local companies.”

The Beatrice windfarm will use a new generation of Siemens 7MW Wind Turbines with 154-meter diameter rotor blades. The wind turbines, the largest generally available, will each be more than 190m high, taller than the Gherkin building in the City of London. The wind farm will be controlled and operated from a base at Wick, with access to the wind farm primarily by Crew Transfer Vessel as well as by helicopters.

Amber Rudd, Secretary of State for Energy and Climate Change, said: “The UK is the world leader in offshore wind and this industry, backed by the UK Government and benefiting from our access to the EU single market, is a success story going from strength to strength. This project will provide home-grown clean energy boosting skills and creating jobs and financial security for working people and their families in Scotland, and across the UK.

“This is great news for the industry and I congratulate the owners SSE, Copenhagen Infrastructure Partners and SDIC Power on achieving this significant milestone in the development of this multi-billion pound infrastructure project.”

The £525 million 19 year long-term European Investment Bank loan will support more than £2.7 billion of overall investment. Part of the European Investment Bank loan will be guaranteed under the European Fund for Strategic Investments.

The European Fund for Strategic Investments was established last year by the European Investment Bank and the European Commission to enable increased lending crucial projects by the European Investment Bank in strategic sectors such as renewable energy, digital infrastructure, social infrastructure, transport and research and development, as well as financing for small and medium enterprises.

Paul Wheelhouse, Minister for Business, Innovation and Energy in the Scottish Government, said: “The Beatrice Offshore Windfarm has the opportunity to deliver so much to Caithness and Scotland as a whole, in terms of employment and community benefit. Scotland’s renewables sector is stronger than ever and our early adoption of clean, green energy technology and infrastructure was the right thing to do. Renewables are now Scotland’s biggest electricity generator, and nearly half of gross electricity consumption comes from renewables. Scotland is well on course to meet its interim renewables target and is delivering a strong contribution to global climate efforts. I look forward to this project contributing to our green energy mix.”

Maroš Šefcovic, European Commission Vice-President responsible for Energy Union, said: “Thanks to the Investment Plan and the European Investment Bank, we are getting closer to reaching our COP21 goals. Already the European Fund for Strategic Investments has helped to finance sustainable, green investments across the EU worth billions of euros. Indeed more than half of the EFSI projects approved so far are in renewable energy, energy efficiency and green investment. There’s a business case – it’s time to invest.”

SSE is working closely with local businesses to create a sustainable local supply chain, advertise opportunities for local suppliers and provide opportunities for local firms to benefit from investment in Scotland’s power infrastructure.

In the last ten years the European Investment Bank has provided more than £4 billion for direct investment in Scotland, with additional investment from UK wide programmes. This has included transport, education, social housing, transport, water, energy, urban regeneration and new hospital investment across the Scotland, alongside additional investment from UK wide programmes.

The European Investment Bank is the world’s largest international public bank and is 16 per cent owned by the UK government.

Over the last decade the European Investment Bank has provided more than £10 billion for investment in energy infrastructure across the UK including renewable energy schemes, national transmission networks and regional power distribution as well as inter-connectors to Ireland, France and the Netherlands.

Lending by the EIB in the UK last year totalled £5.6 billion and supported long-term investment in 40 projects across the country.  This represented the largest annual engagement since the start of EIB lending in the UK in 1973 which has supported nearly £16 billion of overall investment.