Denmark’s EIFO to extend £500m guarantee to East Anglia Three wind farm
A new project finance guarantee will support ScottishPower Renewables' £4.5 bn project – the largest of its kind in a decade
Nowhere in the world has the title of “world’s largest offshore wind farm” been claimed more often than in the North Sea. Whether by value or by scale, claims have been frequent. In 2023, National Grid claimed that the title belonged to Dogger Bank – which the company successfully connected to its substation in Yorkshire. Ørsted, the Danish wind energy behemoth, says it belongs to its Hornsea 2 wind farm – some 89km off the Yorkshire coast.
A more recent claim comes from the East Anglia Three wind farm, owned by ScottishPower Renewables, a subsidiary of the Spanish energy company Iberdrola. The
On August 6, the Export and Investment Fund of Denmark (EIFO) announced a £500m project finance guarantee for East Anglia Three. This is the first time EIFO has extended such financing to an Iberdrola-owned entity.
Strategic finance
Located off the coast of Suffolk, the East Anglia Three project spans 305 sq. km. Its expected installed capacity is around 1400 MW – powered by 95 Siemens Gamesa turbines. That’s enough to deliver energy to 1.3m homes.
Building the large scale offshore wind farm is unsurprisingly capital intensive. Financing it required the collective participation of 23 banks in addition to EIFO.
In July this year, a banking consortium that included HSBC, Santander, BNP Paribas, Bank of China and Bank of Ireland among others signed a £3.6bn financing package. It was 40% oversubscribed.
70% of the package consists of senior debt. The remaining 30% was contributed by Iberdrola shareholders. EIFO was exclusively invited by Iberdrola to participate.
“This financing is highly strategic for Iberdrola. It is a project finance structure backed by 23 international financial institutions plus the significant participation of EIFO, which adds an additional level of strength. It reflects not only the quality of the project, but also Iberdrola's ability to mobilize capital with key international players such as EIFO”, said Jose Sainz Armanda Iberdrola chief financial officer
EIFO guarantee
For EIFO, the deal is part of the organisation’s on-going support for wind energy. “This guarantee underscores EIFO’s ambition to continue advancing the buildout of green energy and contribute to European energy independence. Iberdrola is a valued partner to us in the green transition and we are delighted to be a part of the company’s first project financing”, commented EIFO chief commercial officer Peter Boeskov.
In March this year, EIFO announced another project finance guarantee for an offshore wind farm in Taiwan, being developed by Copenhagen Infrastructure Partners. EIFO has backed around 30% of the world’s offshore wind capacity outside China.
“This milestone demonstrates the role export finance can play in delivering the green transition, and the need for innovative financing solutions to realize the critical projects required to reach decarbonization and energy security goals. We aim to continue this partnership and provide further financing for Iberdrola’s other projects to accelerate the global expansion of green electricity”, Boekov adds.
The strong financier interest has a lot to do with expected revenues. East Anglia Three has received CfD (contracts for difference) contracts from the UK government. In addition, Amazon signed a long-term power purchase agreement in 2024.
Revenue visibility from this project and others around it, contributes to an increasing investor appetite for offshore wind in the region. With the UK government hoping to hit 50GW of offshore wind by 2030, the North Sea will be home to most of that capacity. In the near future, it seems likely that the title of “world’s largest offshore wind farm” will be once again, up for grabs.
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