A FAMILY-owned green energy firm has secured a £210 million investment package that will allow it to go ahead with the construction of two new wind farms in Scotland and create around 250 jobs.
Banks Renewables – part of the property and energy business Banks Group – will use the funding for its planned Middle Muir and Kype Muir schemes in South Lanarkshire, and the Moor House wind farm near Darlington in County Durham.
A funding package was secured in a deal with a group of financial institutions, involving Macquarie Infrastructure Debt Investment Solutions (MIDIS), Santander, ING, National Australia Bank and Rabobank.
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The three wind farms were all successful in the UK Government’s first competitive Contracts for Difference (CfD) programme for on- and offshore projects in 2015. Since then, Banks Renewables has been working towards putting the commercial structures in place to carry them out.
Senvion, a leading global manufacturer, will supply and install the turbines for all three projects, with Kype Muir, Middle Muir and Moor House each comprising 26, 15 and six turbines respectively.
A long-term power purchase agreement (PPA) has also been signed between Banks and Danish group Dong Energy for the output of the wind farms. Balance of plant contracts for Kype Muir and Middle Muir have been agreed with Scottish civil engineering contractor R J McLeod.
Preparatory work has already started on the Moor House site, which will be the ninth onshore farm that Banks has built. It is expected to begin generating clean green energy early next year. Middle Muir is scheduled to go live later in 2018, while Kype Muir is due to come online at the beginning of 2019.
Richard Dunkley, managing director at Banks Renewables, said: “This investment package is a real expression of confidence in both Banks Renewables and the wider UK onshore wind sector, and it’s exciting to now be accelerating the process of taking these three wind farms forward.
“The Kype Muir, Middle Muir and Moor House wind farms have all taken many years of challenging development to get to this stage, and being successful in the Government’s first ever CfD auction against stiff competition was critical to the projects’ success.
“Onshore wind in general and these projects in particular represent the best value for money to consumers as the Government seeks to deliver on its climate change obligations. We believe onshore wind will continue to play a key role in delivering lowest cost carbon free energy for the UK.
“Around 250 jobs will be created through the construction of the three new wind farms, and when complete, they will transform Banks Renewables’ generation capacity from 74 MW to 224 MW.”
Fernando Dominguez de Posada, from Santander, said: “We are delighted to have supported the Banks Renewables management team acting as the sole commercial bank book runner [lead manager] throughout this process and delivering a bespoke funding package that will ultimately help enhance their strategic plan to invest in the UK renewables sector.”
Søren Scherfig, from Dong Energy, added: “This agreement is an excellent example of how Dong Energy leverages its capabilities in balancing wind assets from our unique offshore portfolio.”