- Green financing for Canada Pension Plan Investment Board’s (CPP Investments) interest in two German offshore windfarms
- Talanx funds EUR 321 million of the EUR 511 million project bonds
- Following recent acquisitions of two large solar farms, Talanx continues its sustainability investment programme with a complementary debt investment in offshore wind
- First financing solution with CPP Investments as a key partner
The Talanx Group is financing Germany’s biggest offshore wind farm. Two wind power facilities located in the North Sea were combined in a single project under one project bond: “Hohe See” (497 MW) and “Albatros” (112 MW). The wind parks, which are in operation and connected to the electricity grid, will together generate enough electricity to supply 710,000 households. Following its debt solutions for Gode Wind 1 (2015) and Borkum Riffgrund 2 (2017), this is the third large-scale offshore wind financing that has been structured and accompanied by Talanx.
Talanx affiliates purchased EUR 321 million of the ca. EUR 511 million project bond for global investment manager CPP Investments, which together with leading Canadian energy company Enbridge Inc. holds 49.9 percent of the shares in the projects. Majority shareholder of the wind farm is EnBW, Energie Baden-Württemberg AG with a shareholding of 50.1 percent. “Hohe See” and “Albatros” are located to the west of Helgoland. They are operated with 87 turbines and achieve a total capacity of 609 MW. The offshore wind farms are among the last major projects to benefit from attractive German feed-in tariffs under the Renewable Energy Sources Act (EEG).
Amsterdam Capital Partners B.V. (Amscap), an international adviser and asset manager specialising in offshore wind-energy projects, acted as financial advisor to CPP Investments and managed the structuring and execution of the financing with Talanx as Lead Manager.
Talanx coordinated the senior bond issuance with select German speaking insurance investors including Signal Iduna and Versicherungskammer Bayern. The notes were assigned a BBB+ credit rating from Scope Ratings. The notes were structured to qualify as green bonds under CPP Investments’ Green Bond Framework. Overall, Talanx-led structured finance transactions in the German offshore wind sector exceed EUR 1.9 bn to date.
“Following on from Gode Wind 1 and Borkum Riffgrund 2, this transaction once again demonstrates that Talanx can structure and finance large-scale and complex transactions in the alternative investments space,” was how Dr Peter Brodehser, Head of Infrastructure Investments at Talanx, summarised the commitment. “Moreover, we have found partners in CPP Investments and Amscap who possess exceptional international expertise and reputation in the area of large-scale infrastructure investments. We are consistently driving our strategy forward with the aim of further enhancing and diversifying the proportion of infrastructure assets in our investment portfolio.”
Michael van der Heijden, co-founder of Amscap, furthermore said: “This was another milestone in offshore wind HoldCo refinancing. The appetite for project bonds is increasing and this transaction shows the strong alignment of interests between buy-and-hold lenders and long-term sponsors and that, if managed correctly, the timelines – including the rating – do not exceed those when using bank debt. This transaction also demonstrated that even complex governance arrangements typical to HoldCo financings are not an impediment to putting in place an attractive financing package.”
In December of last year, Talanx acquired two major solar farms in Spain. This acquisition was geared towards supporting the transition to emission-free energy supply. In addition to solar and wind farms, the Talanx portfolio includes other alternative investments such as social facilities, electricity grids, transport and gas caverns. The commitment of Talanx in alternative investments takes account of the Talanx goal anchored in the sustainability strategy of being 100 percent carbon neutral in Germany from 2019 onwards and a complete exit from coal by 2038.