KfW IPEX-Bank participating in the financing of Markbygden ETT Onshore Wind in Sweden
KfW IPEX-Bank is part of an international consortium of banks providing financing for Markbygden ETT wind project in Northern Sweden. With an installed capacity of 650 MW the project will be the largest single site onshore wind farm in Europe, increasing Sweden’s installed wind generation by more than 12.5 percent. Owners of the project are GE (NYSE: GE) and Green Investment Group Limited, part of Macquarie Group, which have joined together for the construction and operation of this project. Together with three other banks, KfW IPEX-Bank is providing around EUR 500 million long-term debt to the project, which has a total investment volume of approximately EUR 800 million. The construction of the wind farm has begun. It is expected to begin commissioning turbines in the second half of 2018 and be fully operational by the end of 2019.
The project was financed on a non-recourse project financing basis with close to EUR 500 million in debt financing secured from European Investment Bank (EIB), Export Credit Guarantees of the Federal Republic of Germany (Hermes Cover), KfW IPEX-Bank, NordLB, and HSH Nordbank. The complex financing structure has a mix of funding from development institutions, the export-credit market and commercial banks familiar with the Nordic energy market. GE Energy Financial Services and Green Investment Group (“the Sponsors”) have jointly acquired the project from Svevind and invested more than EUR 300 million in equity to finance the wind farm. The project benefits from a 19-year fixed volume Power Purchase Agreement (PPA) with a subsidiary of Norsk Hydro, understood to be the largest corporate wind energy PPA in the world.
GE Renewable Energy will supply 179 of its 3.6 MW turbines with 137 meter rotors. The turbine blades will be equipped with an innovative ice mitigation system, ensuring a stable level of availability and reduced downtime. GE is also providing a 20-year Full Service Agreement, and through its Grid Solutions business, will provide the high voltage switchgear for two collector substations at the wind farm.
Green Investment Group conducted a green impact assessment on the project, using the green reporting approach set out in its Green Investment Handbook.
About KfW IPEX-Bank GmbH
Within the KfW Group, KfW IPEX-Bank is responsible for international project and export finance. Its function of providing financing to boost the German and European economy is derived from the legal mandate assigned to KfW. It offers medium- and long-term financing to support key export industries, to develop economic and social infrastructure and to fund environmental and climate protection projects. KfW IPEX-Bank operates as a legally independent group subsidiary and plays a major role in fulfilling KfW’s promotional mission. It is represented in the most important economic and financial centres across the globe.
