11-11-2020 financing offshore wind
TRANSCRIPT
Financing offshore wind
Morten Mygent Pedersen, Chief Underwriter,
&
Jørgen Kragh, Head of Offshore Wind and Project Finance
11-11-2020
Lessons learned from Europe and Asia
By EKF Denmark's Export Credit Agency
About EKF
• Denmark´s official export credit
company
• Owned and guaranteed by the
Danish state
• Nearly 100 years of experience
• Operates on commercial terms
EKF’s sectors
Guarantee & Loan Exposure Number of customers
73%
11%
3%
3%
3%
1%
2%
1%
3%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Other Ships & ports Biomass
Oil and gas industry Manufacturing industry Cement
Agricultural & food technology Infrastructure & supply Wind
22
81
84
4
207
16
11
12
313
0 50 100 150 200 250 300 350
Other Ships & ports Biomass
Oil and gas industry Manufacturing industry Cement
Agricultural & food technology Infrastructure & supply Wind 3
Almost 1/3 of the world'stotal offshore wind capacityhas EKF as financingpartner!
22.3 GW*
Total Globally
installed capacity,
excl. China:
Installed Projects co-
financed by EKF:
6.6 GW
*Source: GWEC YE2019.© MHI Vestas Offshore Wind
**Incl. Corporate Credit Guarantee – London Array 630MW.
Projects under
construction co-
financed by EKF:
4.9 GW
14 years of offshore wind experience
Belwind
Northwester 2C-Power
Northwind
Gemini
Nobelwind
Rentel
Walney Ext.
Q7
Meerwind
Butendiek
Veja Mate
Beatrice
Norther
Hornsea 1
Moray East
Formosa I
Seamade
Yunlin
2006 20162014201220102008 2018
Neart na Gaoithe
Formosa 2
2020
CFXD
Seagreen
What is projectfinance?
• In Project Finance
−the credit assessment is done on
future cash flow and not on an
existing balance sheet.
−the asset of the project (SPV)
generates the cash flow to repay
the loan.
−the debt is non-recourse.
North America Risks – different to the North Sea
• Changing weather
• Tax equity
• Other endangered species
• Local opposition and litigations
• Strong demand for localization
vs. low cost of energy
STAY AGILE AND BE READY FOR CHANGES!
Photo by Krzysztof Kowalik on Unsplash
Photo by Mathew Schwartz on Unsplash
Important challenges - and how we solved them? – page 1
• Vessel defects
• Delays due to design changes
• Supplier defaults
• Operational accident
• Construction accident
Important challenges - and how we solved them? – page 2
• PPAs non-bankable
• Legal issues, e.g. corporate
structures
• Multi-contracting
• Contingency
• Local opposition, e.g. from
fishermen or the community
What can EKF bring to offshore wind in the US?
10
What we bring
• Great experience in offshore project
finance: flexible, reliable and well connected
• Max share 80% of senior debt – in offshore
typically 25-50% of senior debt
• Max. exposure per transaction – approx.
USD 800 million
• EKF can guarantee loans or fund in USD
• Market pricing
• EKF accepts documentation risk
© MHI Vestas Offshore Wind
© MHI Vestas Offshore Wind
EKF – General requirements
• Danish economic interest
• Complying with the OECD Arrangement
on Officially Supported Export Credits
• Pro rata and pari passu with financing
parties
• Risk sharing with all parties
• Full due diligence including assessment
of environmental and social aspects
• Reputational risk
Conclusions
• EKF has long and extensive experience
from financing of offshore wind.
• We believe US may become the next
major market in the world for offshore
wind energy, both fixed bottom and
later floating.
• EKF aims to be a part of the financing
of future US offshore wind energy
projects long term.
• Offshore wind energy will play an
important role for a greener, more
sustainable world.
14
Jørgen Kragh
Morten Mygent Pedersen
Peder Anker Larsen
Thank you!