German offshore wind farm project Deutsche Bucht (DeBU) has reached financial close after securing €988mn in financing.

The financing represents approximately 75% of the project’s required costs and is being provided by 10 international commercial lenders through a non-recourse construction and term loan and related loan facilities.

The lending group comprises Banco Santander, CIBC, Commerzbank, Helaba, KfW Ipex-Bank, National Bank of Canada, Natixis, Rabobank, Société Générale and Sumitomo Mitsui Banking Corporation. Germany’s KfW Ipex-Bank is the mandated lead arranger, facility agent and technical bank for the deal.

The total estimated project cost is set at €1.3bn.

“Deutsche Bucht is our twelfth German offshore wind transaction where we act as lead arranger,” says Markus Scheer, member of the management board of KfW Ipex-Bank.

“This is a further opportunity for us to contribute to the success of energy transition.”

The 252MW project, which will be based in the German North Sea, is owned by Northland Power, a Canadian publicly-traded company based in Toronto.

DeBu is located 95km northwest from the island of Borkum and on completion it is expected to generate enough sustainable energy to meet the needs of over 178,000 households.

The farm will receive a fixed feed-in tariff subsidy for approximately 13 years under the German Renewable Energy Act (EEG), equating to €184/MWh for eight years and €149/MWh for the remainder. The majority of the project returns are expected to be earned during the 13-year feed-in-tariff period.

MHI Vestas Offshore Wind will supply and install the project’s 31 MHI-Vestas V164 wind turbines. The company, a joint venture of Danish manufacturer Vestas and Japanese Mitsubishi Heavy Industries, will also maintain the turbines under a long-term service contract.

DeBu will be constructed at a water depth of up to 40m and will be connected to the 800MW BorWin Beta offshore converter station which has already been built.

Construction on DeBu is expected to begin shortly, with project completion expected by the end of 2019.  The farm will reduce carbon emissions by over 360,000 tonnes per year.