In addition to backing five offshore wind farms, Lloyds Bank has funded other parts of the sector’s supply chain and fully expects to invest again soon. "It’s fair to say that we have spent a lot of time and effort developing a strong franchise in offshore wind," explains Richard Simon-Lewis, a senior director for project finance within Lloyds Bank’s renewable energy team, speaking with Windpower Offshore.
Earlier this week Lloyds Bank said it will invest £1bn (€1.3bn) in UK infrastructure, to support the government's national infrastructure plan. Renewables is one of its priority areas for infrastructure investment.
"Lloyds Bank has developed deep knowledge in offshore wind due to involvement in different parts of the offshore wind supply chain – it didn’t happen overnight," says Simon-Lewis. Beyond financing offshore wind farms, Lloyds has backed UK offshore wind transmission assets and the construction of a jack-up barge.
With one or two more UK offshore wind deals likely to reach financial close before year end, Simon-Lewis describes Lloyds as a "major energy bank," financing projects in Europe, North America and Australia. Its renewables team is keen to continue to develop its expertise and involvement in the offshore market. "The demand for offshore wind finance means it is a place that we need and want to be," says Simon-Lewis.
Other priority renewable technologies for Lloyds’ commercial lending arm are onshore wind, solar photovoltaics and biomass.
Financing for 5 projects
The most recent example of Lloyds’ support for the offshore wind sector was its role in financing the 270MW Lincs offshore wind farm, currently under construction off the east coast of England. The project’s financing was finalised in June and Lloyds was one of ten banks providing funds.
"Lincs was a real milestone for the UK offshore wind market," says Simon-Lewis. "Banks were asked to take on some of the construction risk and we were amongst those that did."
The bank also financed three of the UK’s early offshore wind projects: Lynn, Inner Dowsing and North Hoyle. In addition, it was one of eight commercial banks to back the German offshore wind project, Meerwind Süd-Ost.
Lloyds has also provided finance to several UK offshore transmission owners, companies that have recently – or are soon to - purchase long-term leases to own and operate the export cables and associated infrastructure linking offshore wind stations with the UK's national grid.
The bank backed Transmission Capital Partners in its acquisition of assets linking Gunfleet Sands and Barrow offshore wind stations. It also backed Blue Transmission’s purchase of transmission infrastructure linking Walney 1, and it intends to support the company in its efforts to purchase assets linking Walney 2 and Sheringham Shoal. Lloyds has also been working with Balfour Beatty, the preferred bidder for transmission assets linking Greater Gabbard with the grid.
Lloyds also financed construction of MPI Offshore’s jack-up barge, MPI Resolution, which was used to install foundations for the Thanet offshore wind farm and, more recently, has been working on the Lincs project.