Abu Dhabi Future Energy Co. PJSC (Masdar) and Iberdrola SA have signed a deal to co-invest EUR 5.2 billion ($6.07 billion) in the under-construction 1.4-gigawatt East Anglia III wind farm on the United Kingdom side of the North Sea.
Under the agreement, Spanish power and natural gas utility Iberdrola will farm out 50 percent of the project to state-owned renewable energy company Masdar for equal ownership.
“All the conditions precedent have been achieved and the transaction is expected to close shortly”, a joint statement said Thursday, calling it “the largest offshore wind transaction of the decade”.
On Wednesday a financing agreement with 24 international banks was signed for East Anglia III, securing GBP 3.5 billion (EUR 4.1 billion). “Oversubscribed by 40 percent, the facility is one of the largest ever such transactions”, the statement said. “It will cover a substantial part of the total costs of the project, estimated at approximately EUR 5.2 billion, without consolidating debt in any of the partners’ financial statements”.
Located about 69 kilometers (42.87 miles) from the Suffolk coast, East Anglia III is expected to produce enough power for over 1.3 million homes, according to Scottish Power Ltd., Iberdrola’s UK unit.
Iberdrola expects to start generation 2026. The project received consent August 2017. Onshore construction started July 2022. Offshore construction began earlier this year.
The government awarded East Anglia III two contracts for difference (CFDs) in 2022 under Allocation Round IV and 2024 under Allocation Round VI.
CFDs secure stable revenue for low-carbon power projects. Developers are entitled to a flat indexed rate for the electricity they produce over a 15-year period. The payment is equal to the difference between the strike price, which reflects the cost of investing, and the reference price, or the average market price for electricity in Great Britain.
“CfDs incentivize investment in renewable energy by providing developers of projects with high upfront costs and long lifetimes with direct protection from volatile wholesale prices, and they protect consumers from paying increased support costs when electricity prices are high”, the Department of Energy Security and Net Zero says.
In 2024 Amazon.com Inc. penned an agreement to buy 159 MW, or 700 gigawatt hours a year, from East Anglia III.
Iberdrola expects to provide over 2,300 jobs during construction.
East Anglia 3 is part of the three-farm East Anglia Hub. East Anglia 2, with a planned capacity of 960 MW, is expected to begin construction 2027 and commence production 2028. The 714-MW East Anglia 1 went onstream September 2019.
East Anglia 3 counts toward a EUR 15-billion partnership between Iberdrola and Masdar signed 2023 for investment in key markets including the UK, Germany and the United States.
Also on Thursday the companies announced the completion of the 476-MW Baltic Eagle wind farm on Germany’s side of the North Sea, the first project completed under the Iberdrola-Masdar partnership.
Baltic Eagle will supply around 475,000 households and prevent about 800,000 metric tons of carbon dioxide emissions per annum, the statement said.
“Joining forces with Masdar in the East Anglia III offshore windfarm will allow Iberdrola to accelerate our strategic focus on the UK, where we are investing GBP 24 billion to 2028 in transmission and distribution networks and in renewable energy, contributing to the delivery of the UK Government’s ambitious electrification plans”, Iberdrola executive chair Ignacio Galan said.
Masdar chair and United Arab Emirates Industry and Advanced Technology Minister Sultan Al Jaber commented, “Masdar and Iberdrola are continuing to forge one of the largest and most powerful strategic clean energy partnerships to accelerate capacity growth in Europe and worldwide. Offshore wind will play a crucial role in the global energy transformation, and landmark developments like Baltic Eagle and East Anglia THREE are significant advances towards clean energy targets in major European nations”.
“With demand surging due to exponential AI growth and the rise of emerging markets, projects such as these have never been more critical”, Al-Jaber added.
Work is underway to identify other opportunities under the EUR 15-billion partnership, the companies said.
To contact the author, email jov.onsat@rigzone.com
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