Blackstone Private Equity Firm Invests in German Offshore Wind…In a Big Way

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Blackstone, the US private equity firm, is investing in German offshore wind power, and in a big way. The company announced that majority-owned WindMW had secured 822 million euros (~USD1.18 billion) in financing from a group of seven commercial lenders for the Meerwind wind farm 50 kilometers off Heligoland in the North Sea. Blackstone fund affiliates will invest nearly all the equity capital to fully fund the Meerwind project’s 1.2 billion euro (~USD1.7 billion) total investment cost.

The Meerwind project, Blackstone’s largest renewable energy investment to date, is actually made up of two wind farms: Meerwind East and Meerwind West. It entails erecting 80 wind turbines with a capacity of 288 MW and connecting them to Germany’s mainland grid. That’s enough electricity to supply some 400,000 homes and avoid some 1 million tons of carbon emissions, according to the company.

Supporting the financing is Germany’s feed-in tariff, which essentially fixes the amount paid for Meerwind’s electricity output for a period of 13 years. Grid operator Tennet TSO will connect the wind farm to the grid as per German law.

“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,” commented 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.”

Blackstone also announced that it had obtained the government permit necessary to build a second 64-turbine offshore wind farm in the North Sea. Estimated project cost of the Nordlicher Grund wind farm is 1.3 billion euros (~USD1.86 billion). Situated approximately 100 km off the German coast, construction is expected to begin in 2013 and be complete in 2016.

Construction of the Meerwind wind farms is slated for completion in 2013. Siemens won the contract to supply and install Meerwind’s 80, 3.6 MW wind turbines, which will cover 42 sq. km. in water depths between 22-26 meters (~73-86 feet).

The Meerwind project is the first to complete financing under the KfW-Ministry for the Environment (BMU) Offshore Wind Programme, and just the second German offshore wind farm financed by private investors.

“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,” WindMW board member Peter Giller said. “I want to thank our lenders who have been great partners throughout this process.”

Banking group KfW and Germany’s Federal Ministry for the Environment launched the program in early June with the establishment of a 5 billion euro (USD7.15 billion) fund for the financing of wind farms, part of the German government’s “10 Point Immediate Action Programme” to base the country’s electrical power generation on highly efficient renewable energy systems.


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