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Northland Power to acquire German OWF

4C Offshore | Tom Duit
By: Tom Duit 06/03/2017 Northland Power
Northland Power Inc. (Northland) and Highland Group Holdings Ltd. (Highland), have signed an agreement whereby Northland will acquire 100% of the 252MW Deutsche Bucht offshore wind project located off the coast of Germany.

Northland expects to invest approximately $400m of corporate funds with the balance of the project cost provided by project financing and pre-completion revenues. The investment is set to be sourced from cash on hand, corporate liquidity, and preferred shares.

The project is Northland's third offshore wind project and is located 95km northwest of the island of Borkum in the German Exclusive Economic Zone of North Sea, 77 km from Northland's other German offshore wind project, Nordsee One. The total estimated project cost is approximately €1.2 billion (£1.04bn), and once operational, it is expected to generate over 1,000 gigawatt hours of electricity per year.

Deutsche Bucht
is entitled to receive a fixed feed-in tariff subsidy for approximately 13 years under the German Renewable Energy Act ("EEG"), equating to approximately €184/MWh for 8 years and EUR €149/MWh for the remainder. The majority of the project returns are expected to be earned during the 13 year feed-in-tariff period, with the remainder of the expected returns earned in the later years from the German wholesale electricity market.

The project is currently in an advanced stage of development and is expected to begin construction shortly after financial close, anticipated by mid-2017.  with project completion is expected by the end of 2019. Like Gemini, Northland will use a two-contract construction strategy. MHI Vestas Offshore Wind (MVOW) has been selected as the preferred supplier to supply and install the turbines. An affiliate of Van Oord nv, the balance of plant contractor for Gemini and the other preferred supplier, will provide the turbine installation vessel and supply and install the wind turbine foundations and the offshore electrical infrastructure. MVOW will also maintain the turbines under a long-term service contract. The wind farm will be connected to the 800MW BorWin Beta offshore converter station which has already been constructed.

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