The European Investment Bank (EIB) has agreed to provide GBP 82 million for the purchase, operation and maintenance of a new electricity transmission connection between the Humber Gateway offshore windfarm and the UK national electricity network.
The new Humber Gateway transmission link will connect the 73 turbine 220 MW Humber Gateway windfarm to the mainland transmission grid at Hedon, and includes an onshore substation in Hull, an offshore substation and 40km of mostly undersea cables.
“Investment to harness the UK’s offshore wind resources provides clean energy and is creating thousands of skilled jobs across the country. Offshore transmission connections are a key part of the UK’s future energy infrastructure and the European Investment Bank is pleased to support significant new investment to connect the Humber Gateway windfarm to the national network. This new scheme represents the tenth UK offshore transmission link supported by Europe’s long-term lending institution over the last five years,” said Jonathan Taylor, European Investment Bank Vice-President.
The European Investment Bank is the world’s largest international public bank, owned directly by the 28 European Union member states, and one of the world’s largest lenders for renewable energy-related investment. Over the last decade, the EIB has provided more than GBP 3.2 billion for investment in UK energy infrastructure. This has included support for investment in 10 different transmission connections to windfarms in UK waters in the North Sea and Irish Sea since 2011.
The 19 year long-term EIB loan will be provided to Humber Gateway OFTO Ltd and the consortium behind the transmission link project comprises Balfour Beatty and Equitix.
Financing provided by the European Investment Bank represents nearly 50% of eligible project costs and the long-term EIB loan is alongside senior debt provided by three commercial banks: Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank and Societe Generale.
Earlier this year, the EIB agreed to provide GBP 77 million to support the transmission link to the Westermost Rough windfarm, located eight kilometres north east of Withernsea off the Holderness coast.
In the UK, separate Offshore Transmission Owners (OFTOs) take responsibility for offshore transmission assets under long-term OFTO licences. Since its launch in 2009, the OFTO regime has helped to attract significant investment and is managed under a regulatory framework overseen by energy market regulator Ofgem. Under the OFTO regime, investors are not directly exposed to construction risks as the transmission assets are only transferred after construction completion.
Other long-term investment in Yorkshire supported by the EIB includes the Green Port in Hull, investment by Yorkshire Water, the universities of Hull and York, schools in Barnsley, Bradford and Sheffield and upgrading hospitals in Wakefield and Pontefract.
Lending by the EIB in the UK last year totalled GBP 5.6 billion and represented the largest annual engagement since the start of EIB lending in the UK in 1973. EIB lending in the UK in 2015 supported nearly GBP 16 billion of overall investment in 40 projects across the country, which schools, university campuses, hospitals, upgraded energy links, renewable energy projects and water infrastructure.
©Balfour Beatty 2016
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