U.K.'s Green Bank Invests in London Array Windfarm

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - The U.K.'s Green Investment Bank (GIB) has announced an investment of almost €70 million ($95 million) in the world's largest offshore windfarm, London Array.

The investment will refinance a significant portion of Masdar's 20% equity stake in the project, GIB noted. The project also received refinancing from a number of additional banks, taking the total investment to €313 million ($425 million).

The U.K. government launched the unique bank last year, giving it a budget of €4.5 billion ($6.1 billion) to invest in renewable energy projects. Last summer the bank placed offshore wind at the top of its priority list, with the goal of financing renewable energy projects at a 'near commercial' stage of development. For additional information, see June 28, 2012, article - U.K. Green Investment Bank to Back Offshore Wind.

"The U.K. has taken an early lead in realising the promise of offshore wind," explained Shaun Kingsbury, chief executive, U.K. Green Investment Bank. "A number of domestic and international parties have moved quickly to develop and construct several of the world's largest offshore wind farms which are now operating efficiently and profitably in our waters. The U.K. Government has ambitions to go further and to see the development of new projects. For that to happen it is important that those best placed to take early stage development and construction risk can get their money out of operating assets and reinvest it. GIB's investment in London Array is the third example of our investment strategy to develop a secondary market in operating assets; enabling utility developers to recycle their capital into new offshore wind construction projects."

Masdar (Abu Dhabi, United Arab Emirates) has agreed that the capital released from this refinancing will be re-invested into the U.K. offshore wind sector.

London Array, which was officially opened in July, boasts 175 turbines and has a total generating capacity of 630-megawatts (MW), enough to power nearly half a million homes. For additional information, see July 8, 2013, article - World's Largest Offshore Windfarm Officially Opened.

The U.K.'s Business Secretary, Vince Cable, commented: "London Array is an impressive project which has helped the U.K. earn its position as leading the way in the development of offshore wind. This announcement by the U.K. Green Investment Bank is an example of how this new institution is helping to attract new capital from around the world and promoting additional private investment into this important sector."

Dr. Sultan Ahmed Al Jaber, CEO of Masdar, added: "Reaching financial close on a project of this scale and complexity marks another milestone in Masdar's dedication to breaking new ground within the renewable energy sector. London Array is delivering half a million U.K. homes with clean energy".

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