Generating windpower for thousands of European households

At the heart of its commitment to financing renewable energy, Societe Generale supports major windfarm projects in Europe.

Societe Generale continues to explore opportunities around windfarms and renewable energy following our successful involvement in several high-profile projects benefitting hundreds of thousands of households.

Most notably, the bank accompanied the Dudgeon windfarm in the financing of one of the most important wind energy generators in the UK.

Completed in 2017, Dudgeon has 67 turbines situated 32km off the north Norfolk coast, generating power for 410,000 UK households and replacing 893,000 tonnes of CO2 per annum. Importantly, more than 50% of the total costs of construction is fed back into the UK economy.

Dudgeon is the first offshore wind project to be completed under the UK government’s Contract for Difference (CFD) scheme, which is designed to incentivise investment in low-carbon energy by ensuring future revenue streams are stable and predictable.  This is achieved through a simple contract; when the market price for electricity generated exceeds a pre-agreed limit, the generator pays money back to a low carbon contracts company (LCCC), but when the price generated falls below the pre-agreed minimum, the LCCC pays back to the generator.

These contracts are a key aspect of the UK government’s drive to reduce carbon emissions by 80% by 2050.

CFDs are currently only applicable to offshore wind projects, but, as part of a plan to double its financing for renewable energy over the five years to 2020, Societe Generale is also looking at a host of other options.

According to Allan Baker, Global Head of Power Advisory & Project Finance at Societe Generale, the bank is actively involved in projects in geo-thermal, solar and floating offshore wind. “We are looking at tidal, but financing of tidal is some way in the distance at the moment,” he added.

Dudgeon alone raised £1.3bn with the debt maturing in 2032. Allan Baker hailed it as, “the first offshore wind deal on which Societe Generale has acted as both advisor and lender.”

Beyond filling both those roles, the deal was also the first time the UK platform had operated as hedging co-ordinator.

A European leader in windfarm financing

Dudgeon has been accompanied by a host of other recent successes in the windfarm space, including Beatrice, a development of 84 turbines off Scotland’s east coast; and Clover, a portfolio of three separate onshore farms (Rusholme, Glassmoor II and Green Rigg) acquired by CGN using bridge financing from SG Hong Kong and a subsequent project finance take out by Societe Generale’s London team.  Societe Generale acted as mandated lead arranger and hedge provider for both.

Outside of the UK, the bank has also been involved in leading the financing for Valorem, an established renewable energy producer in France; Rentel a 309MW (42 turbine) offshore wind farm in Belgium; and Merkur, a 66-turbine offshore farm in the German North Sea. Further projects are on the horizon, including Kriegers Flak in the Baltic Sea off Denmark and Borssele in the Netherlands, where Societe Generale is again acting as financial advisor.

Supporting renewable energy in Australia

Royalla Solar Farm is Societe Generale’s first solar power project in Asia Pacific and well complements its existing wind, hydro and geothermal portfolio. Societe Generale leverages on its renewable energy project finance and interest rate hedging expertise to contribute to the success of Royalla Solar Farm project, and consequently supporting sustainable development in Australia.

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