Blackstone to invest €2.5bn in German wind farms

5 Aug 2011

Private equity firm Blackstone Group is to invest €1.2bn in ‘Meerwind’, which is set to be Germany’s largest ever offshore wind farm when its completed in 2013. Blackstone has also acquired a permit to construct a second €1.3bn North Sea wind farm project – the Nördlicher Grund wind farm – that’s set to be readyd by 2016.

WindMW GmbH, a company majority owned by funds managed by Blackstone, has completed the financing for “Meerwind, which will be the first German wind farm to be fully financed by private investors.

The 288-megawatt 80-turbine wind farm will be situated about 50km off the German coastline, southwest of Helgoland, in the North Sea.

Siemens, currently the market leader for wind turbines, has won the 288MW turbine order for Meerwind – the company’s first ever wind turbine deal with a private equity firm.

“The entry of new stakeholders into the offshore wind business will clearly boost the massive development of energy from the sea,” said Jens-Peter Saul, CEO of Business Unit Siemens Wind Power, today.

Construction of the Meerwind facility is scheduled to be finished by 2013. It will aim to produce sufficient power to service up to 400,000 households – helping Germany eliminate about one million tonnes of carbon emissions per year.

Germany is driving its renewable energy focus, following the announcement from the country’s ruling coalition in late May that it is to shut down all 17 of its nuclear plants by 2022. Germany currently 23pc of its energy from nuclear power. It will replace the deficit by ramping up its renewable energy portfolio and by increasing its investments in energy research. Currently, Germany’s largest operational wind farm is the 60MW Alpha Ventus project.

Offshore wind programme

Meerwind is only the second German offshore wind farm to complete its financing and is the first to close under the recently unveiled Offshore Wind Programme, the KfW programme.

A group of seven commercial lenders, including Commerzbank, KfW IPEX-Bank, Bank of Tokyo-Mitsubishi, Dexia, Lloyds Banking Group, Santander and Siemens Bank together with EKF, the export credit agency of Denmark, and KfW-Bankengruppe, will provide total financing of €822m for the project, with a total investment cost of €1.2bn.

Affiliates of Blackstone Capital Partners and Blackstone Energy Partners are to provide substantially all of the project’s invested equity. The other partner in the project is Windland Energieerzeugungs GmbH, the project’s initial permit holder.

Meerwind future wind farm

The investment will fund the installation of 80 substructures with Siemens 3.6MW-120 wind turbines, the laying of infield cables, as well as the installation of an offshore high voltage substation.

The grid operator Tennet TSO GmbH will carry out the wind farm’s connection to the German grid.

“The German government has demonstrated tremendous leadership in supporting private offshore wind development and we are pleased that Meerwind is the first project to reach financial close under the visionary KfW programme. With the development of Meerwind, we are able to support Germany in meeting its green energy targets.” said Peter Giller, WindMW board member in a statement released by Blackstone today.

Entry of new stakeholders into offshore wind

“The German regulatory framework is well designed and essential to the development of the tremendous and as yet largely untapped resource that offshore wind represents,” added David Foley, Blackstone senior managing director and CEO of Blackstone Energy Partners. “This project exemplifies the progress and positive impact on the economy that can be achieved when private capital works in partnership with government, entrepreneurs and industry.”

64-turbine Nördlicher Grund wind farm

As to Blackstone’s granting of the permit for the 64-turbine Nördlicher Grund wind farm, this farm is set to have an estimated construction cost of €1.3bn. It will be situated about 100km off the German coast in the North Sea. Construction is expected to commence in 2013 and to be completed by 2016.

WindMW was established in 2008 as a Blackstone portfolio company to develop German offshore wind farms.

Photo: The Meerwind offshore wind farm will be positioned in the North Sea off Germany’s coastline, southwest of Helgoland

Carmel Doyle was a long-time reporter with Silicon Republic