UK: Hogan Lovells Advises Lenders to Blue Transmission Consortium on GBP 110 Million OFTO Purchase

Hogan Lovells advised the bank lenders to the Blue Transmission consortium of Macquarie Capital Group Limited and Barclays Integrated Infrastructure Fund on the consortium’s successful bid to acquire and operate the transmission link to the Walney 2 offshore wind farm for £110 million.

The lending group comprised Lloyds Banking Group, SMBC, Bank of Tokyo Mitsubishi, Mizuho Corporate Bank and the European Investment Bank.

Blue Transmission was granted an offshore transmission owner license on 25 September 2012 following a competitive tender by Ofgem under the Offshore Transmission Owner (OFTO) regime. Blue Transmission will operate the link to the 51-turbine wind farm in the Irish Sea for 20 years.

Walney 2 is the highest value project to have reached financial close so far in the first transitional tender round of the OFTO regime. The OFTO license for Walney 2 is the second to be granted to the Blue Transmission consortium, and the sixth OFTO license that Ofgem E-Serve has granted in the first tender round.

The Hogan Lovells team advising the lenders comprised London infrastructure and project finance partners Andy Gallagher and Andrew Briggs, supported by senior associate Charles Ford, Of Counsel Emma Clarke and associates Tom Spinks and Mark Nash.

This team also advised the Blue Transmission consortium’s lenders on their successful financing of the acquisition of the transmission link to the Walney 1 offshore wind farm for £105.4 million in October 2011.

Commenting on the transaction, Andy Gallagher said:

“The OFTO regime continues to deliver a new source of capital for the offshore wind industry and is an essential element under-pinning the development of the UK’s renewable energy portfolio and reduction of renewable energy costs for consumers. Walney 2, the second of three high value projects being acquired by Blue Transmission in the first tender round and on which Hogan Lovells is advising their lenders, is the largest OFTO to close to date. We are pleased to have worked again with Blue Transmission and its banks on their second successful investment in this sector.”

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Press release, September 28, 2012; Image: DONG Energy