Blackstone to invest $3.5 billion in German wind farms

FRANKFURT Fri Aug 5, 2011 11:40am EDT

FRANKFURT (Reuters) - U.S. private equity group Blackstone said it would invest 2.5 billion euros ($3.5 billion) in two offshore wind farms in German waters, boosting the emerging industry in the North Sea.

"This is a long-term commitment for us," Sean Klimczak, Blackstone's managing director, told journalists in Berlin on Friday.

The Berlin government plans to have 10,000 megawatts (MW) of offshore wind power capacity installed by 2020 among wide-reaching plans to replace closed nuclear facilities with green energy.

"The entry of new stakeholders into the offshore wind business will clearly boost the massive development of energy from the sea,' said Jens-Peter Saul, chief executive of Siemens Wind Power, which is providing turbines for the first Blackstone farm.

For the 288 MW Meerwind park, which will provide power for about 400,000 households when completed in 2013, Blackstone said it secured 822 million euros of finance from seven banks, the export credit agency of Denmark and German state bank KfW.

The total investment cost is 1.2 billion euros, and the project will be the first German wind farm fully financed by private investors, Blackstone said.

Blackstone said it had also acquired a permit to construct the Noerdlicher Grund wind farm, costing 1.3 billion euros, for commissioning in 2016.

Klimczak declined to comment on whether the group was seeking a third wind-farm permit, as reported by the Financial Times on Friday.

In a separate statement, engineering group Siemens said it secured orders to deliver 80 turbines of 3.6 MW capacity each for Meerwind, representing its sixth order for offshore wind turbines in German waters.

SERVICE BASE

Separately, German utilities E.ON and RWE said they will launch a base for the servicing of offshore wind farms on the islands of Helgoland, along with Blackstone's WindMW.

WindMW aims to use the Helgoland base for the 80 turbine Meerwind park, while E.ON aims to use it for its 300 MW Amrumbank project.

The small Helgoland archipelago is some 40 miles off the German coastline and therefore in a good position to service the new offshore wind parks under construction in the south-east North Sea.

"With these plans ... we participate in creating Germany's energy transition," said Joerg Singer, the mayor of Helgoland, which stands to gain 150 new jobs from the project.

RWE's renewable energy subsidiary, Innogy, will use the base to service a 295 MW offshore wind park called Nordsee Ost, whose construction will start by the end of this year, the three companies said in a statement.

They declined to give financial details of the project, which will house construction and shipping firms to be engaged in maintaining newly constructed wind turbines, which will have a lifespan of around 20 years each.

Innogy is also planning a 1,000 MW offshore wind park called Innogy Nordsee 1, among other projects it is pursuing offshore Britain, Germany and the Netherlands.

Offshore wind power delivers a third more electricity than onshore turbines because winds are at higher speed and more intense at sea, but waves and salt water increase maintenance needs and costs.

Germany's first North Sea wind capacity came on line in 2009, and the total last year stood at only 168 MW, while total accumulated onshore capacity at the end of 2010 was 27,214 MW, according to industry figures.

(Reporting by Vera Eckert and Sabine Siebold; Writing by Victoria Bryan; Editing by Jane Baird)

($1=.7099 Euro)

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