GIEK’s mission is to promote Norwegian exports – and it is doing that big time in the offshore wind market both in Europe and further afield. Having reached around NOK 4 billion in June, its latest NOK 3.6 billion (GBP 300 million) risk-sharing splash supports supply contracts for Norwegian companies Aibel and OHT Alfa Lift AS to the Dogger Bank mega-project in the North Sea.
Dogger Bank is being developed by joint-venture partners Equinor and SSE Renewables, who reached Financial Closure for Dogger Bank A and B last week. Total cost of the project is GBP 65 billion. In 2019, they secured a guaranteed electricity price from the UK’s renewables programme for 15 years to support what will be the world’s largest wind park with a combined installed capacity of around 3.6 gigawatts (GW) when all three wind farm areas are completed. Together they are projected to generate enough electricity to power 4.5 million British households – or 5% of the UK’s total power demand.
Equinor and SSE are seeing the usefulness of GIEK guarantees in their project financing mix. Norway’s robust treasury position makes GIEK’s triple A-rated instruments among the most valuable guarantees internationally, while GIEK’s participation often makes it easier to finalise funding for such large projects. Subject to deliveries from Norwegian exporters, GIEK guarantees extend the lending capacity of banks which is a big competitive advantage.
“GIEK’s pragmatic and collaborative approach has been an important factor in enabling Financial Close to be reached, and the sponsors look forward to continuing to work closely and productively with GIEK throughout the term of the financing,” says Oliver Cass, Finance Director at Dogger Bank Wind Farms.
Know-how and massive capacity
GIEK has many years of experience in participating in complex international projects within energy and shipping, and has successfully collaborated with many different financial actors. “We go the extra mile to help Norwegian suppliers in tough international markets,” says GIEK managing director Ms Wenche Nistad. “As a rapidly growing sector, offshore wind promises big opportunities for agile companies, and particularly those with deep marine expertise from oil and gas, and shipping.”
Aibel will supply high-voltage transformer platforms to Dogger Bank, while OHT Alfa Lift will be fielding its custom-built semi-submersible vessel Alfa Lift to install wind turbines and transition pieces. The ship is currently under construction in China.
Nistad urges other Norwegian exporters and their sub-suppliers to get in touch with their banks and GIEK if they need export credit funding to cover deliveries to the burgeoning offshore wind sector. “Together we can find the optimal solution to help you grow, especially in a challenging economic situation both nationally and globally,” she says.