Global law firm Norton Rose Fulbright has advised the lenders on the financing for the Mutkalampi Park wind project. With a capacity of 404MW, the project will be the largest onshore wind farm in Finland, accounting for 2% of the country’s annual production.
Fully-owned by leading French renewables developer Neoen, the project will be financed by Neoen’s own capital and a €290 million non-recourse senior debt facility provided by German institutional asset manager MEAG, a Munich Re company, acting on behalf of primary insurance companies of ERGO, institutional investors via MEAG and several investment funds managed by MEAG. Neoen has also secured €38 million in VAT funding from Swedish bank SEB. Total investment in the wind farm is projected at €478 million, aside from financing costs.
The majority of the Mutkalampi electricity output is allocated to five 10-year corporate Power Purchase Agreements: a 125 MW agreement with Google from 2019 and four other agreements signed with a Dutch consortium (Heineken, Nobian, Philips and Signify) in 2020, amounting to 126 MW. Commencement of energy production will be staggered, with a first leg scheduled to open by the end of 2022 and the second in the third quarter of 2023.
A Norton Rose Fulbright team led by EMEA head of energy Charles Whitney and London-based climate change and clean energy partner Andrew Hedges advised MEAG and SEB. Support was provided by Amsterdam partner Wouter Hertzberger, counsel Matthijs van Leeuwen, senior associate Gino Bell, Warsaw-based counsel Marta Kawecka, and London-based associate Monica Chen.
Charles Whitney comments:
“This project is notable not only for its size, but also because it is underpinned by a number of corporate power purchase agreements with subsidiaries of Google and a number of large Dutch corporates, in addition to the merchant financing element. The PPAs with the Dutch buyers are all cross border, virtual PPAs, which is a truly innovative move by Neoen and its partners. It is a trend that we expect to see more of in the European corporate PPA market, as corporates continue to make strides towards decarbonisation as part of the wider energy transition.”