Barclays has confirmed a loan of £95.5 million to the developers of the Moray West offshore wind farm, offering a hedge against inflation and changing interest rates.
Comprising 60 turbines and just over 880MW of capacity, the Moray West windfarm is set to be built around 13 miles off the coast in the Moray Firth.
Due to be completed in 2025, it will generate enough power for up to 1.3 million homes.
London-headquartered banking giant Barclays confirmed this week that it has supplied £95.5m in loans to developer Ocean Winds for pre-hedge execution.
The funds helped ensure the project against fluctuating interest rates, inflation and FX hedges, protecting the project and from “adverse market movements” in the current volatile economic environment, the bank said.
Ocean Winds – a 5050:50 joint venture between EDP Renewables and ENGIE – said the funds would support the next phase of the project’s construction as part of a wider syndicated £2bn loan which closed in April.
At that time, the project backers said this would allow the project to move to the next phase of supply chain activity, with installation works due to commence later this year.
First steel cutting for the scheme also took place at Nigg in April, while construction works on an operations and maintenance building for servicing the farm are now underway in Buckie.
Moray West project director Pete Geddes said the support of Barclays had helped the project reach financial close.
“This means we are now on track to commence the next phase of the project which will see the installation of the wind farm in late 2023.
“Our close working relationship with Barclays has given us the support required to meet the UK and Scottish government renewable energy targets.”
Barclays is one of seven banks which have supported two project-financed offshore wind farms involved in the Contract for Difference allocation rounds – the UK’s renewables procurement scheme – and has helped operators evolve their “sophisticated” offtake agreement strategies.
In this case, the bank executed hedges at the point the project was awarded the Contract for Difference in July 2022 and syndicated them to the lending banks at financial close.
Jamie Grant, managing director of Barclays Corporate Banking in Scotland, added: “Barclays expertise and sophisticated approach to the financing of such a major development in Scotland’s green economy reinforces our ability to support key clients in the renewables sector which look to innovate with revenue offtake strategies.
“With the commodity cost escalations that have been experienced recently, it is likely that more renewable developers will also consider innovation with their offtake strategies and we are well placed to support projects like Moray West.”
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