Bank of China contributes £33.44 million GBP to the £401.33 million GBP transmission term loan of a £1.39105 billion GBP syndicated loan for the 1075 MW Seagreen Phase 1 Offshore Wind Farm Project (Linked to Record ID#99670, #99671, #99673, and #99674)

Project narrative

On June 3, 2020, financial close was reached on a deal in which a syndicate of 12 banks — including the Bank of China (BOC) — entered into a £1.39105 billion GBP ($1.75051 billion USD) syndicated senior loan agreement with Seagreen Alpha Wind Energy Limited (SAWEL) — a special purpose vehicle (SPV) jointly owned by Scotland-based SSE plc (49% equity stake) and France's TotalEnergies S.A. (51% equity stake) — for the 1075 MW Seagreen Phase 1 Offshore Wind Farm Project. This loan consisted of six tranches: a £159.48 million GBP ($200.69 million USD) generation term loan, a £43.82 million GBP ($55.14 million USD) generation revolving credit facility (RCF), a £434.00 million GBP ($546.15 million USD) export credit agency (ECA)-backed credit facility, a £401.33 million GBP ($505.04 million USD), a £114.67 million GBP ($144.30 million USD) transmission RCF, and a £237.75 million GBP ($299.19 million USD) ancillary facility. The loan carried a maturity period of 19 years and a final maturity date of June 3, 2039. In addition to BOC, the following lenders contributed to the loan syndicate: Lloyds Bank, MUFG Bank, Sumitomo Mitsui Banking Corporation (SMBC), Barclays Bank, National Westminster Bank Plc (NatWest), Banco Santander S.A., ABN AMRO Bank N.V., Landesbank Hessen-Thüringen (Helaba), Rabobank, Allied Irish Bank (AIB), and Caixabank S.A.. 11 lenders, including BOC, contributed £9.95 million GBP ($12.52 million USD) to the £159.48 million GBP generation term loan, except SMBC, which contributed £50.00 million GBP ($62.92 million USD). Record ID#99670 captures BOC's contribution. All 12 lenders, including BOC, contributed £3.65 million GBP ($4.60 million USD) to the £43.82 million GBP ($55.14 million USD) generation RCF. Record ID#99671 captures BOC's contribution. Only six lenders — Lloyds, SMBC, Barclays, NatWest, Santander, and CaixaBank — contributed to the £434 million GBP ECA-backed credit facility, each contributing £72.33 million GBP ($91.02 million USD). EFK provided £304 million GBP and GIEK provided NOK 1.6 billion ($172 million USD; £136 million GBP) worth of guarantees to the ECA-covered facility. All lenders, including BOC, contributed £33.44 million GBP ($42.09 million USD) to the £401.33 million GBP transmission term loan. Record ID#99672 captures BOC's contribution. All lenders, including BOC, contributed £9.56 million GBP ($12.02 million USD) to the £114.67 million GBP transmission RCF. Record ID#99673 captures BOC's contribution. All lenders, including BOC, contributed £19.81 million GBP ($24.93 million USD) to the £237.75 million GBP ancillary facility. Record ID#99674 captures BOC's contribution. In addition to the bank debt, the project received a 22-year £220 million GBP mezzanine financing bond arranged by MUFG and placed with German institutional investors. In addition to the debt, there was an estimated £1.68195 billion GBP ($2.11658 billion USD) of equity, with SSE providing £824.15 million GBP ($1.03712 billion USD) and TotalEnergies providing £857.80 million GBP ($1.07946 billion USD). The total project had a cost of approximately £3.073 billion GBP ($3.86708 billion USD) and a 42:58 debt-to-equity ratio. The purpose of the project were to be used by the borrower for the development and construction of a 1075 MW offshore wind farm located 27 kilometers from the coast of Angus, Scotland, in the North Sea, in the outer Firth of Forth in an area of approximately 2,850 square kilometers. The wind farm consisted of 114 Vestas three-bladed horizontal axis V164-10.0 MW wind turbines with maximum heights to the tip of the blade of 204 meters and blade diameter of 164 meters, mounted on monopile foundations with length of 95 meters and diameters of 10-meters, all interconnected with up to 325-kilometers of inter-array cables. Electricity generated by the turbines was transited through a subsea export cable to landfall at Carnoustie, where it would then be transmitted via 19-kilometer long underground cables to a new substation at Tealing near Dundee. The project included an operations and maintenance (O&M) base at Montrose Port at its South Quay included an operations building, warehouse, communications tower, and pontoon for crew transfer vessels. Seagreen 1 was expected to generate 5,000 GWH annually, enough to power about 1.6 million Scottish homes and offset two million tons of carbon dioxide emissions annually. It had an expected operational life of 25 years. It was expected to create up to 410 jobs. Once completed, Seagreen would be Scotland's largest and the world's deepest fixed foundation offshore wind farm. The Seagreen Offshore Wind had two Power Purchase Agreements (PPAs) supporting it: one PPA subsidized by the Government of the United Kingdom (via a 15-year Contract for difference (Cfd) awarded in September 2019) with a strike price of £41.61 GBP/MWh strike price for 42% of the output and one PPA with SSE plc for 30% of the output. The remaining 28% of the project's output was to be sold on the merchant market. In 2010, the Crown Estate awarded the development rights for the project. In 2012, environmental approval was granted. In 2014, Marine Scotland consent for the development of Seagreen. In July 2016, 2.6 GW worth of Scottish offshore wind farm projects, including Seagreen, lost planning permission due a ruling in Scottish courts that they were a risk to wildlife brought by the Royal Society for the Protection of Birds. In August 2016, the decision was appealed and then in July 2017, it was overturned. In March 2018, Seagreen submitted an application to Marine Scotland to modify the capacity limits. In September 2018, Seagreen submitted plans to Marine Scotland to reduce the turbines from 150 to 120, lowering the expected capacity to 1075 MW. Seagreen was developed as a 50:50 joint venture between SSE and US firm Fluor Corporation In September 2018, SSE exercised its preemption right to take a 100% equity stake in Seagreen for a consideration of £118 million GBP. On June 3, 2020 (the date of financial close), SSE sold a 51% equity stake to TotalEnergies. Seagreen 1 was initially developed as a two phase project called Seagreen Alpha and Seagreen Bravo; each phase would have consisted of 75 turbines and 525 MW. In 2018, Seagreen Wind Energy Limited (SWEL) — another SPV for the project sponsors — eliminated the 525 MW limit per phase requirement and expanded the total capacity to 1075 MW as one project with 114 turbines called Seagreen 1. As SWEL had received consent for 150 turbines originally, it planned an expansion called Seagreen 1A that would add the remaining 36 turbines, connected to a separate substation to the national grid (the Scottish Power substation at Cockenzie in East Lothian, via a 110-kilometer export cable), raising the total capacity of the Seagreen Offshore Wind Farm to 1.5 GW, with a submission in January 2022 for larger and taller turbines for Seagreen 1A. In October 2022, the Section 36 application to add the additional 36 turbines was approved. SSE was responsible for leading development and construction of the asset, as well as provide O&M services once operational. In October 2019, MHI Vestas Offshore Wind (MHI Vestas) won the contract to provide 114 wind turbines for the project. In December 2020, MHI Vestas subcontracted Siemens Energy to provide 114 low-loss 66kV distribution transformers for the project. Petrofac was responsible for the design, supply, and installation of high-voltage alternating current onshore and offshore substations. Subsea 7 was contracted in June 2020 for engineering, procurement, construction and installation (EPCI) services for the 114 wind turbine foundations and associated inter-array cables. Seaway 7, the renewable business unit of Subsea 7, was appointed for the EPIC services. In July 2020, Seaway 7 subcontracted Saipem for the installation of the foundations. In July 2020, Seaway 7 subcontracted Hellenic Cables to design, manufacture, test and supply 66kV inter-array cables and associated accessories for the project. In June 2020, SSE Renewables contracted Nexans to supply onshore and offshore export cables, namely the design, manufacture, and installation of three 65 kilometer-long offshore export cables and three 20 kilometer-long onshore export cables. Ramboll Group provided design services for the foundation sub-structures. Northern Marine Services (Scotland) Ltd was contracted in June 2021 to support the delivery and installation of the turbine foundations. Inland and Coastal Marina Systems UK was contracted in August 2021 to supply and install a new 30-meter pontoon at Montrose Port. Penglai Jutal Offshore Engineering Heavy Industries Co., Ltd. (PJOE) was responsible for the manufacture of wind turbine jackets. COOEC-Fluor Zhuhai was responsible for the fabrication of more offshore wind jackets. Sarens provided heavy lifting services to help the assembly of the wind jackets at Zhuhai. BMS Heavy Lift was contracted to assist onshore assembly and offshore installation of the turbines. Linxon won an engineering, procurement, and contract (EPC) for all onshore civil works and to supply, install, and commission the HVAC equipment for the offshore substation platform and the Tealing substation. Seaway 7 awarded a contract for the provision of wind turbine generator substructures to Lamprell. Petrofac subcontracted work to Eversendai. Pinnacle provided its project management software to support Eversendai. Pert-Bruce Construction won a contract to construct the O&M base at Montrose Port at its South Quay. Seaway 7 subcontracted Global Port Services, to provide storage, marshalling and logistics services for the foundation towers and site-enabling services for the pre-assembly construction of wind turbine components at the Port of Nigg. Alico Industries provided sacrificial anodes to provide cathodic protection to the substations and jacket foundations. Edda Wind won a contract to design and build a service operation vessel (SOV) known as the 'Edda Brint' for 15 years of operations and maintenance at the wind farm. PD&MS Group was contracted to recycle/repurpose a communications from the Moray East wind farm for the communications mast of the O&M base at Montrose Port. Seagreen experienced controversy over its choice of manufacturers. Many of the major components were contracted to overseas firms, such as in China and the United Arab Emirates, rather than Scotland-based companies, to the chagrin of Scottish businesses and laborers. The GMB Union alleged that the outsourcing of production was proving that popular claims that renewable energy would lead to a surge of new jobs in Scotland were false. For example, Burntisland Fabrications (BiFab), a Scottish manufacturer, received support from the Scottish Government to get contracts for the project, but SSE declined to award them, citing the non-competitiveness of BiFab's offer. Early works began in January 2020. The wind farm was expected to begin operations in 2023. Turbine installation began on December 5, 2021. Seagreen generated its first power in October 2022. The final turbine was installed in June 2023, with full operations expected for that summer.