Enbridge Partners with EnBW on 497-MW German Offshore Wind Project

Hohe See is a late design-stage project located in the North Sea, 98 kilometers off the coast of Germany. As co-developer, Enbridge will participate in the construction and operation of the project. Once in service in late 2019, Enbridge's total investment in the project will be $1.7 billion (EUR1.07 billion). The project is expected to be strongly accretive in the first full year of operations.

"Offshore wind presents promising large-scale opportunities to increase Enbridge's presence in the renewable power business and is one of our key platforms in the growth of our enterprise going forward," Enbridge President and CEO Al Monaco said of the transaction. "We like this business, and this project in particular, as it is supported by strong commercial underpinnings and provides attractive returns that are consistent with our investor value proposition.

"This partnership also provides an option for further future investment in a planned 112-MW expansion of the offshore wind farm, providing Enbridge with an additional organic growth opportunity within the European offshore wind market," added Mr. Monaco. "EnBW is an excellent partner and leader in German power generation and offshore wind development and we look forward to working together to execute on this project and potential future opportunities.

"This project represents an attractive opportunity for Enbridge to extend growth beyond 2019 and highlights the strength of the $48 billion in probability weighted development projects that we introduced in conjunction with our Spectra acquisition announcement. These projects, among others, will support the extension of our 10-12 percent annual dividend per share growth rate through 2024," concluded Mr. Monaco.

Under the German government's offshore wind incentive structure, power generated by this project will effectively receive long-term fixed pricing for a period of 20 years. Development and construction has been de-risked as the project has now achieved all key regulatory approvals and fixed-price engineering, procurement, construction and installation contracts have been secured with key suppliers representing more than 90 percent of the project capital costs.

Enbridge's investment in 2017 will be $0.6 billion (EUR0.44 billion) with the remaining capital to be invested through to the in-service date in 2019. Equity financing needs for the full $1.7-billion investment have been pre-funded through financing actions completed in the fourth quarter of 2016, specifically through the preferred share and hybrid instrument offerings.

EnBW is one of the largest energy supply companies in Germany and Europe, with significant experience in construction and operation of offshore wind assets. The company developed the first commercial offshore wind farm in Germany, which has been in operation since 2011.

"We are pleased to join forces with Enbridge in delivering this project," said EnBW CEO Frank Mastiaux. "EnBW has established a strong position in offshore wind and together with Enbridge, we will combine our expertise and advance our joint interest in this growing sector."

Enbridge has several projects under development in the European offshore wind market, including a 24.9 percent stake in the 400-MW Rampion wind project off the coast of England (expected to be fully operational in 2018), and a 50 percent interest in French offshore wind development company Éolien Maritime France SAS, which is pursuing three large-scale offshore wind that would produce a combined 1,428 megawatts (MW) of power and are subject to final investment decision.

Enbridge's financial advisor for this transaction was J.P. Morgan Securities LLC and its legal advisor was Dentons.