GE Energy Financial Services  (GEEFS) and Green Investment Group (GIG) have raised €800mn to finance the development of a 650MW onshore wind farm in Sweden.

GEEFS and GIG jointly invested €300mn in equity, with a 50-50 split, to purchase the Markbygden ETT project, in northern Sweden, from Svevind. The partners also sought a mix of funding from development institutions, the export credit market and commercial banks familiar with the Nordic energy market.

“The project was financed on a non-recourse project finance basis,” managing director of Europe and head of global capital advisory at GEEFS, Bob Psaradellis, tells GTR.

“As the wind turbines are manufactured by GE in Germany, the sponsors, assisted by NordLB as mandated lead arranger and ECA bank, procured a 95% political and commercial risk insurance policy from Euler Hermes, under which the European Investment Bank, NordLB, KFW and HSH provide funding. There is also a parallel uncovered EIB facility and an uncovered commercial bank facility. The transaction represents the first time that EIB is providing both direct funding and funding under Euler Hermes cover.”

The transaction is GIG’s first equity investment following its acquisition by Macquarie, and its first investment outside of the UK.

Head of GIG in Europe Edward Northam says: “This project represents the new frontier in European onshore wind. It demonstrates that in the right market, with the right location, the right technology and the right partners, it is possible to develop and attract private capital into new onshore wind farms.”

GEEFS and GIG have agreed a structured 19-year fixed volume power purchase agreement (PPA) with a subsidiary of Norsk Hydro, one of the largest aluminium producers in the world. The PPA enables Norsk Hydro to fix the price of a significant portion of the electricity demand for its Norwegian manufacturing facilities. The PPA is claimed by GEEFS to be the largest corporate wind energy PPA in the world.

“The offtaker is an unrated subsidiary of the Norsk Hydro group. Raising long-term funding against an unrated credit was beyond the available capacity of the commercial debt market,” says Psaradellis.

The project will be the largest single site onshore wind farm in Europe, increasing Sweden’s installed wind generation by more than 12.5%. Construction work on the project has started, with the commissioning of turbines due to start in the second half of 2018, and project completion due by the end of 2019.

GE Renewable Energy will supply 179 of its 3.6MW turbines with 137-metre rotors. The company is also providing a 20-year full-service agreement, and through its Grid Solutions business, will provide the high voltage switchgear for two collector substations at the wind farm.

The Markbygden ETT project was developed over 15 years by Swedish wind developer Svevind. The new development work could see the project become the largest collection of wind farms in Europe.