Ireland: Gaelectric completes purchase of 46MW Cloghboola Wind Farm

Gaelectric Holdings plc announces that it has completed the purchase of the 46 MW Cloghboola Wind Farm in Co. Kerry from Enercon for €60 million utilising an innovative hybrid project financing structure arranged through Nord/LB.

Cloghboola Wind Farm commenced operations in 2015 and comprises 16 no. Enercon E-82 E4 turbines, each rated to generate 3MW of power, sufficient to meet electricity demand of almost 30,000 households. The Cloghboola purchase brings Gaelectric’s onshore portfolio of operating wind farms in Ireland towards the halfway point of its 2017 goal of 400 MW of generating wind assets by 2017.

Commenting, Barry Gavin, Gaelectric Chief Operating Officer, said: “We are continuing to progress towards our 2017 goal of 400 MW of wind assets generating power. We are pleased to be completing this latest transaction with our long term funding partners, Nord/LB, but this time utilizing an innovative financing structure which gives us access to an extended term out to 19.5 years and involves participation for the first time from institutional funds advised by Hastings. The nature and stable returns characteristic of wind investments make them an ideal asset class for institutional and pension investment. We expect to see this source of funding develop further in the future.”

Total debt for the project is €60m and splits into a 19.5 year long fixed rate note and a shorter 9.5 year term loan including a credit enhancement facility to allow institutional investors to come into the financing. Nord/LB acted as Structuring Bank and Mandated Lead Arranger providing a loan of approximately €36m. A Hastings-advised fund, working in partnership with Nord/LB provided €26m for the fixed rate note when the transaction was closed last week.

The transaction represents a ground breaking product development and shows that institutional debt can be successfully provided to medium sized projects in combination with bank debt.

Heiko Ludwig, Managing Director of Nord/LB commented: “This innovative financing follows the work and development Nord/LB has started with the team in New York and has now concluded in an adjusted structure suitable for the European market providing additional funding sources to our clients whilst keeping the flexibility of tailored project financing to renewable energy projects”

Lisa Shaw, Director of Hastings commented “Hastings is pleased to continue its global renewable investment activity with this transaction. The financing solution developed with Nord/LB optimises the portfolio and risk return fit for our client within a typically robust project finance framework.”