09/02/2024
Scotland Sets Sail on Offshore Wind Farm Targets
This week’s key terms/concepts:
• Project Financing: A model of financing whereby the funding of long-term projects, such as public infrastructure, is facilitated through a specific financial structure.
• Net Zero: The general term for environmental targets of reducing carbon emissions to effectively zero, which companies and organisations can aim towards to tackle climate change.
• Restructuring: The process of a company making significant changes to how it operates, typically in order to reduce debt, but also including general transfers of ownership or merging.
Recently, Scottish offshore wind project Inch Cape has reached financial close, raising over £3.5b in funding and now progressing into its construction phase. The project was awarded planning permission in 2014 and will play a key part in joint owner ESB’s net-zero goals for 2040, as well as contributing to the Scottish government’s own goals of installing 11 gigawatts of offshore wind by 2030. The project is Scotland’s largest infrastructure project currently in construction and will provide approximately 1.1 gigawatts of power, already representing 10% of Scotland’s wind targets.
Why is this important for law firms?
The deal represents an increasing push towards carbon-free power, which has seen a rise in support over the last few years and will continue to get approval across the UK and beyond. Law firms will play central roles in advising the financial aspects of the transactions, such as acquisitions or restructuring if required.
Linklaters acted as legal adviser to the equal joint owners of Inch Cape, ESB and Red Rock Renewables, with its Energy and Infrastructure team aiding in the project financing. The firm has previously acted on various other wind farm related transactions, including several transactions surrounding Danish offshore wind developer Ørsted, as well as project financing and restructuring deals in Taiwan.
Norton Rose Fulbright also acted as legal adviser to the lenders for the Inch Cape project, following on from their notable work in 2021 advising the lenders for the Dogger Bank Wind Farm project- which upon completion in 2026 will be the largest offshore wind farm in the world.
The project is expected to be fully complete by 2027.
Lex Weekly 