APAC: CGN buys 650MW Swedish wind farm from Macquarie 

18 July 2018 - 12:00 am UTC

China General Nuclear (CGN) has agreed to acquire a majority stake in a 650MW wind park in Sweden as it builds up its renewable portfolio in northern Europe.

The Chinese power giant’s European unit signed a deal on Wednesday (17 July) to purchase a 75% stake in the North Pole Wind Farm from Macquarie Capital and General Electric (GE) according to a company statement. A spokesperson for CGN declined to disclose the cost of the investment.

Also known as the Markbygden ETT Wind Farm, the 650MW single-site onshore wind project is being built near the northern Swedish city of Piteå, close to the Arctic Circle.

GE and Macquarie’s Green Investment Group (GIG) commenced construction of the 179-turbine project last year after reaching financial close in November.

The wind farm is expected to be fully operational by end 2019 and will increase Sweden’s installed wind generation capacity by over 12.5%,

The project was originally developed by Svevind. GE Energy Financial Services and GIG both acquired 50% stakes in the project from the Swedish firm in 2016, with each contributing EUR 300m equity.

First round offers for the Macquarie Capital-led 75% stake sale were due in February. GIG sought to sell its entire 50% stake while GE EFS was to sell up to 25% of its shareholding.

The project has secured a 19-year fixed rate and fixed volume PPA with aluminum producer Norsk Hydro. Sale of EL-certificates, part of Sweden’s green certificate system, will also add to the revenue stream.

“To thrive in the European renewables is a key strategy for CGN,” said Lu Wei, president with CGN Europe. “The latest deal allowed us to extend our footprint into Scandinavia and bring our total installed capacity to 1.6GW.”

The North Pole Wind Farm reached financial close in November last year on the back of a EUR 500m long-term non-recourse debt package from a mix of development finance institutions, as well as export-credit agencies (ECA) and commercial lenders.

The European Investment Bank(EIB) agreed to lend EUR 180m, including EUR 80m covered by German ECA Euler Hermes. Mandated lead advisor NordLB, HSH Nordbank and KfW IPEX-Bank provided EUR 300m of commercial loans along with a EUR 20m contingency facility, a EUR 5m working capital facility, and a EUR 6m decommissioning letter of credit.

The 650MW project is the first phase of the Markbygden Wind Farm complex in the Markbygden area west of Piteå planned by Svevind with a total proposed capacity of up to 4GW.

CGN Europe is one of the most active Chinese acquirers of renewable projects overseas. It has acquired and developed nearly 1GW of wind and solar projects across UK, France, Belgium, Ireland, the Netherlands and other European countries since its launch in 2014. In November last year, it agreed to take over a 70.8MW onshore wind power portfolio in France as part of its ongoing investment spree.