Banking Syndicate Complete Financing for Offshore Wind Farm EnBW Baltic 1 (Germany)

Already since May 2011 the wind farm EnBW Baltic 1 has been delivering green power from the Baltic Sea – since Friday its long-term financing is also in place: a banking syndicate comprised of the European Investment Bank (EIB), KfW IPEX-Bank, Landesbank Baden-Württemberg (LBBW) and NIBC Bank N.V. will extend a loan amounting to EUR 138 million to the joint project company EnBW Baltic 1 GmbH & Co. KG from EnBW and 19 municipal utilities. The long-term project financing replaces a prefinancing.

The total investment costs for Germany’s first commercial offshore wind farm amount to about EUR 200 million. The EIB, KfW IPEX-Bank, LBBW and NIBC Bank N.V. – for the financing all in the function of mandated lead arrangers – are now providing the debt capital financing via long-term loans. In this regard, the loan already committed by the EIB in March amounting to EUR 80 million will be incorporated into the structured finance and partly guaranteed by the commercial banks. In addition, KfW IPEX-Bank, LBBW and NIBC Bank N.V. are providing a loan amounting to EUR 58 million. In this transaction, KfW IPEX-Bank functions as documentation agent as well as technical and modelling bank. LBBW will take on the role as facility and security agent. NIBC Bank N.V. acts as insurance bank.

According to Dr Matthias Kollatz-Ahnen, Vice President of the European Investment Bank, the project EnBW Baltic 1 provides a strong signal for the further development of the offshore wind sector in Germany. “The EIB finances offshore wind power in a targeted manner in order to speed up technological maturity. This in turn will enable broader participation of investors in future projects.”

Markus Scheer, member of the Management Board of KfW IPEX-Bank, highlighted the wind farm EnBW Baltic 1 as an important step for German climate protection efforts: “Ambitious projects such as EnBW Baltic 1 give the energy turnaround its face. KfW IPEX-Bank is making its contribution to realising this by supporting such renewable energy projects through long-term structured financings.” “The challenges on the path to achieving a CO2 neutral energy supply system are enormous. So we are all the more pleased that with EnBW Baltic 1 our customer EnBW was able to realise its first offshore wind farm in the Baltic Sea so successfully”, said Andreas Sahl, Head of Large Corporates at LBBW. And Matthias Meyer, head of Infrastructure & Renewables Frankfurt at NIBC Bank N.V. adds: “Baltic 1 exemplifies, that well structured projects can also be financed in difficult times.”

EnBW 1 is operated by EnBW Erneuerbare Energien GmbH, a subsidiary of the power supply company EnBW Energie Baden-Württemberg AG. Since August 2011, 19 municipal utilities primarily from Baden-Württemberg are participating with a total of 49.7 per cent in EnBW Baltic 1 through a holding company. The now concluded project financing completes the last important step of the participation model between EnBW and the municipal partners.

 “We are pleased with the confidence of the capital market, which confirms the technical and economic quality of our project. The conclusion of the agreement with this group of distinguished financing partners is an important milestone, also for the financing of our forthcoming offshore wind projects,” commented Stefan Thiele, Spokesman for the Managing Board of EnBW Erneuerbare Energien GmbH.

The offshore wind farm lies 16 km off the coast of Mecklenburg-Western Pomerania, north of the peninsula Darß/Zingst in the German 12 nautical-mile zone of the German Baltic Sea. Spread over an area of about seven square kilometres, 21 Siemens wind turbines generate a peak capacity of 48.3 megawatts. The energy produced at sea nets about 185 gigawatt hours annually and is fed into the public power grid. This can meet the demand for the equivalent of 50,000 households.

About the KfW IPEX-Bank GmbH

KfW IPEX-Bank is responsible for international project and export finance within KfW Bankengruppe. Its function of providing financing in support of the German and European economy is derived from the legal mandate of KfW Bankengruppe. The focus of its business lies on the provision of medium and long-term financing to support key industries in the export economy, on the development of economic and social infrastructure and on the financing of environmental and climate protection. It operates as a legally independent group subsidiary and is represented in the most important economic and financial centres around the world.

 About the EIB

The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.

 About LBBW

Landesbank Baden-Württemberg (LBBW) is both a commercial bank and the central bank of the savings banks in Baden-Württemberg, Saxony and Rhineland-Palatinate. With total assets of EUR 387 billion and around 12,400 employees (as of 30 Sep. 2011), LBBW is one of the largest banks in Germany, and in its core market Baden-Württemberg it is by far the most important one. Its core activities are the private customer business and the business with corporate customers, in particular small and medium-sized enterprises, as well as savings banks. A further focus is placed on real-estate financing as well as the customer-oriented capital market business with banks, savings banks and institutional investors. Together with its regional customer banks Baden-Württembergische Bank (BW-Bank), Rheinland-Pfalz Bank and Sachsen Bank, LBBW services more than one million private customers and 25,000 corporate customers in more than 200 branch offices.

 About NIBC Bank

NIBC was founded in 1945 in order to support the reconstruction of the Netherlands after the second world war. Today the bank successfully offers its clients a broad range of services through its divisions Merchant Banking and Specialized Finance. Merchant Banking offers a combination of advice, financing and co-investment in the Benelux and Germany. Specialised Finance has an international sector focus and operates in shipping & intermodal, oil & gas services, infrastructure & renewables and real estate. The bank also offers residential mortgages and online retail saving deposits via NIBC Direct in the Netherlands and Germany. NIBC has offices in The Hague, Brussels, Frankfurt, London and Singapore.

 About EnBW

With some six million customers and more than 20,000 employees, EnBW Energie Baden-Württemberg AG generated annual revenue in excess of € 17 billion in 2010. As the third-largest energy company in Germany, they focus on the electricity business – in the generation and trading segment and the grid and sales segment – and the gas as well as energy and environmental services business. They are committed to Baden-Württemberg and Germany as locations and these are the focal points of their activities. They also operate in other European markets.

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Offshore WIND staff, December 05, 2011; Image: EnBW