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German development bank KfW, and its project and export credit subsidiary KfW-IPEX Bank, have joined commercial banks in a €1.2 billion ($1.34 billion) 12.5-year project financing for the €1.6 billion 396 MW Merkur offshore wind project in Germany. KfW is providing €360 million under the umbrella of its Offshore Wind Energy Programme, while KFW-IPEX is contributing a further €97.4 million.
Structured via special purpose company Merkur Offshore, the €1.6 billion debt and equity funding - signed on 12 August - is split between €500 million of equity from the project’s sponsors - Partners Group, (50%), InfraRed Capital Partners (25%), DEME Concessions Wind (12.5%), GE Energy Financial Services (6.25%) and L’Agence de l’environnement et de la maîtrise de l’énergie (6.25%) – and €1.2 billion of project debt.
The commercial bank line-up for the debt comprises ABN Amro, Commerzbank (modelling and tax), Deutsche Bank (account bank, facility and security agent, joint hedge coordinator and sole bookrunner); Natixis; Rabobank (insurance bank); SEB (KfW applicant bank); SMBC and Societe Generale (documentation bank and joint hedge coordinator).
Merkur is a construction-ready wind farm located in the German exclusive economic zone approximately 45 km north of the island of Borkum. In early 2015, DEME Concessions Wind took over the development of the project from former developer Windreich and was joined by GE Energy later that year.
Construction will be under a dual contract structure with GE as supplier of 66 GE Haliade 150-6 megawatt wind turbine generators and GeoSea as turnkey contractor for the entire balance of plant. Offshore foundations installation is expected to start in August 2017, with project completion scheduled for March 2019.
Advisers to the project company include Amsterdam Capital Partners (financial and equity advisor), Deutsche Bank (debt advisor), Hogan Lovells (legal advisor), EY (tax advisor), Marsh (insurance advisor) and PMC (hedging). CMS, Norton Rose Fulbright and Allen & Overy provided sponsor legal counsel.
The lenders were advised by Clifford Chance (legal), Sgurr (technical), JLT (insurance), Poyry Management Consulting (market) and Operis (model).