Financing renewable energy: wpd
"We are very pleased that we successfully implemented this important step in a short period of time," says Ralf Ketteler, Head of Commercial Project Management at wpd europe GmbH. "After the good cooperation with Commerzbank and NORD/LB in the Tohkoja project, we now have added the next chapter with Karhu. Everyone involved can be proud of what has been achieved. This is an important contribution to the development of the renewable energy industry, which supports the global energy transition"
Head of Commercial Project Management at wpd europe GmbH
Commerzbank provides financing for wpd europe’s largest-ever onshore wind project
Founded in 1996, wpd AG is one of the leading developers and operators of offshore and onshore wind technology and solar farms across Germany, Europe, Asia and the Americas. Employing 3,200 individuals worldwide and operating in 28 countries, the German company supports renewables projects all the way from inception to the point of dismantling or repowering. With 2,400 wind turbines and 5,150 MW of installed capacity globally, and a project pipeline of 26,100 MW wind and 1,650 MW solar, wpd is an important contributor towards decarbonisation efforts.
wpd europe has already completed four wind farms in Finland and has a pipeline of approximately 1,000 MW of projects at various stages in the country. Having successfully collaborated with Commerzbank and NORD/LB over the financing of the Finnish wind farm, Tohkoja, the company approached Commerzbank once again to discuss the financing of its largest-ever onshore wind project – Karhunnevankangas (Karhu). The wind farm, located in the Osterbotten region of western Finland, has a total planned capacity of 188 MW and the energy generated will be sold to UPM Kymmene via a long-term power purchase agreement (PPA).
Given the size and complexity of the project, substantial expertise and funding were required, and all within relatively tight timeframes. The company required a financing package of approximately EUR 220 million to cover the construction and operating phases, as well as a long-term Euler Hermes facility, various guarantees and an equity bridge facility. Commerzbank has been active in the financing of renewable energies for more than three decades and is one of the largest financiers of renewable energies in Europe, so was keen to support the project.
wpd europe, together with the hard work of the teams at Commerzbank and Norddeutsche Landesbank (NORD/LB), achieved financial close of the Karhu project in April 2021. In addition to the participation of the two banks, this was also the first time Euler Hermes Aktiengesellschaft accompanied the financing process for wpd europe. As mandatary of the German government, Euler Hermes was responsible for the audit in obtaining the export credit guarantee from the German government.
The financing was a great achievement that was only made possible by the good collaboration between all the parties involved. Its success enabled wpd europe to further consolidate its position as a competent and reliable partner in the Finnish energy market.
Mark Hubenthal, Director Origination Project Finance of Commerzbank's Center of Competence Energy, assesses the project as follows: "This is a highly exciting and challenging transaction, especially with regard to market price issues and PPA design, which proves that complexity can be mastered together in good partnership. We aim to be pioneering in our approach to sustainable financing for companies and energy projects and are proud to represent an integral part of Commerzbank’s wider sustainability strategy".
Director Origination Project Finance at Commerzbank AG