Macquarie provides over £500 million of senior secured debt for the UK’s 659MW Walney Extension

Macquarie has provided part of a new long-term debt facility to fund the acquisition of a 50 per cent share in the Walney Extension project in the United Kingdom (UK).

The Macquarie investment, led by the Macquarie Infrastructure Debt Investment Solutions (MIDIS) team on behalf of institutional investors - will be used to part finance 50 per cent of the acquisition and construction of the 659MW offshore wind farm, jointly owned by Ørsted (50 per cent), PKA and PFA (50 per cent). Macquarie’s investment forms part of an approximately £1.3 billion senior secured project debt issuance. MIDIS, alongside other cornerstone bond investors, have acquired a combination of 16-year amortising CPI linked and nominal bonds.

The facility also represents the first offshore wind farm transaction that Macquarie has completed since the acquisition of the Green Investment Group (GIG) from the UK Government this year. In support of the transaction, GIG carried out a green impact assessment of the project on behalf of Macquarie using the green reporting approach set out in its green investment handbook.

James Wilson, Co-Head of MIDIS said: “We have been working closely with Ørsted over the last 15 months as cornerstone investor on this innovative staple debt financing package to support a successful sale process and deliver an excellent long term debt investment for Macquarie’s institutional clients. The transaction demonstrates Macquarie’s ability to apply our considerable expertise and resources to deliver large amounts of capital, with execution certainty, to Macquarie Group of Companies support the most complex transactions. In addition, we have been able to ensure a package of credit protections which is delivering high quality CPI-linked cashflows for our investors looking to match their long dated pension liabilities.

The Walney Extension offshore wind farm was awarded an agreement for lease by the Crown Estate on 11 May 2010 to develop an extension to the existing Walney I and II Offshore Wind Farm and benefits from a UK Government-supported Contract for Difference. The Walney Extension project will consist of up to 87 turbines with a maximum capacity of 659MW, enough to power up to 590,000 UK homes.

The Walney Extension will also contribute to the Government’s target of achieving 15 per cent of total energy production from renewable sources by 2020. Since 2012, MIDIS has invested over £1.5 billion in infrastructure debt for renewable project transactions globally, across 18 projects, totaling approximately 1.75 GW of installed capacity.