Clifford Chance

Clifford Chance advises Blauwwind offshore wind farm as it reaches financial close

On 28 June 2018 the financial close of the Blauwwind offshore wind farm took place. This offshore wind farm will be constructed and will operate within the Borssele Wind Farm Zone, the Netherlands. The farm will include 77 V164 9.5 megawatt (MW) turbines produced by MHI Vestas, with a total installed capacity of 731.5MW, enough to power some 825,000 households. The main construction work is due to start in the fourth quarter of 2019, with commercial production expected in early 2021.

The consortium partners are Partners Group (45%), Shell (20%), Diamond Generating Europe (DGE) (15%), Eneco Group (10%) and Van Oord (10%). Shell and Eneco Group have also secured 15-year Power Purchase Agreements (PPAs) from the consortium under which each will buy 50% of the power generated by the wind farms. Van Oord will execute the “Balance of Plant” for the project, consisting of the engineering, procurement and construction of the foundations and inter array cables. The offshore substation Borssele Beta will be designed and constructed by TenneT.

The wind farm is to be built and will operate under the Stimulering Duurzame Energieproductie / Stimulation of Sustainable Energy Production (SDE+) subsidy scheme. During the first 15 years of operation, Blauwwind will receive a guaranteed price of EUR 54.49/MWh under the Dutch SDE+ scheme, after which the power will be sold at prevailing rates in the wholesale power market. The project capex for the construction phase is EUR 1.3 billion, part of which will be funded through project finance.

The Amsterdam office of international law firm Clifford Chance has been advising Blauwwind as sponsors counsel and project counsel since 2016. The project is being developed under a two-contract strategy as successfully banked and constructed on, amongst others, the Gemini offshore wind farm in the Netherlands, on which Clifford Chance was also lead and project counsel. Since 2016 Clifford Chance has acted as legal advisor with regard to the structuring of the project, including project documentation, financing strategy and corporate strategy. It includes innovative features in the operation and maintenance strategy of the turbines. In addition, the firm acted as advisor on the sell-down by Shell, DGE and Eneco as sellers of a 45% stake in Blauwwind to Partners Group on 26 June 2018. As project counsel the Clifford Chance team also set up the corporate and shareholder structure and governance for the project sponsors. The project involves the participation of a consortium of twelve international banks.

Hein Tonnaer, partner at Clifford Chance and team leader: ''We are very pleased to have been involved as a legal adviser for this successful project from the beginning in 2016. It provides an excellent framework for future renewable energy projects. It is one of those projects that require a legal advisor that can offer the full spectrum of state-of-the-art services and that has global reach. We have been able to work on this project as a fully integrated project finance team consisting of a wide range of disciplines within our firm, including project finance, regulatory and experience in balance of plants and turbine contracts."

The Clifford Chance core team that acted as sponsors and project counsel since 2016 was led by Hein Tonnaer and furthermore consisted of Liesbeth Buiter, Nanette Rutgers, Bram Kocken, Tim Heerschop, Han Kalule, Sarah Lewis, Moussa Louizi and Tara Kok. Clifford Chance Amsterdam has a leading project finance practice including specialists in financial and corporate law. Apart from the Blauwwind Project the team has acted as advisor to other major Dutch wind projects, such as Gemini, Luchterduinen, Westermeerwind, NOP Agrowind and also projects in the Nordics and other parts of Western Europe.