Canadians buy into 600MW Gemini
Canada’s Northland Power has agreed to buy a majority stake in the 600MW Gemini offshore wind project in Dutch waters, in another vote of confidence in the European industry by overseas investors.
Ontario-based Northland plans to buy 55% stake, and said it will “actively participate in Project Gemini by taking a lead role during the remainder of development as well as construction and operations”.
The total project cost of Gemini is expected to be C$3.8bn ($3.66bn), said Northland. It expects financing via a combination of non-recourse project debt, mezzanine financing and equity from a consortium that now includes Northland itself, developer Typhoon Offshore, Siemens and HVC, a group of Dutch municipalities.
It will also include marine contractor Van Oord, which said it will hold a 10% equity stake.
Northland’s own net investment will be about C$400m.
The deal is a result for Typhoon Offshore, which has always planned to sell the majority of Gemini before it enters construction but has been looking for an investor for some time. It will be left with a 5% stake in the wind project.
As reported first by Recharge in June, Gemini will begin construction in late 2014. The work was originally planned to begin this summer, but was delayed following the decision to switch to 150 4MW Siemens turbines, rather than the Bard machines originally envisaged.
Northland said it expects Gemini to start commercial operations in 2017 at the site 85km of the Netherlands coast.
The company said the plant will benefit from agreements under the Dutch governments Sustainable Energy Production Incentive Programme, which provide “a premium price for the large majority of the wind farm's output for 15 years and incorporate mechanisms that reduce revenue exposure to wind production volatility”.
Northland has a 1.3GW portfolio spanning wind, solar, hydropower and gas.
The company said: "Northland's entry into the burgeoning offshore wind sector is consistent with our strategy of developing and investing in opportunities with long-term secured revenue contracts with creditworthy counterparties that yield attractive rates of return."
The deal follows the decision by Japan’s Sumitomo to invest in two Belgian offshore wind projects, and compatriot Mitsubishi’s stakes in major grid-link developments.