Renewable Energy Finance: Thriving Against the Odds- Offshore Wind Projects Secure ~$15bn in 2023 Amidst Market Challenges

published on 21 September 2023

In spite of challenging financial market conditions and negative news regarding the financial feasibility of offshore wind development, debt financing for these assets continues to thrive in Europe. In 2023 alone, the industry has seen ~$15bn in loans secured for the purpose of financing major offshore wind projects. Enerdatics has observed that developers' innovative approaches to power sale arrangements have played a critical role in improving the bankability of these projects and attracting financing. One notable example is the UK's Moray West offshore wind farm, where Ocean Winds decided to sell approximately 52% of its output to corporate offtakers at a higher power price compared to its low strike price of GBP 37.35/MWh secured under CfD. Additionally, Poland's offering of 25-year Euro-pegged and inflation-indexed CfDs has provided offshore wind projects with a more attractive business case for investment.

This trend was recently exemplified by the successful project financing of $3.8 billion secured by Northland Power and Orlen for the development of the 1.1 GW Baltic Power offshore wind farm. The financing was led by the European Investment Bank, with participation from 24 other regional and international banks. This capital injection will support the timely commercial operationalization of the project, which is scheduled for completion in 2026.

To gain a deeper insight into financing trends at the corporate and asset-level in Europe and globally, request a trial of the Enerdatics Energy Transition Finance database today.

The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.

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