SgurrEnergy completes advisory scope for lenders on Lincs offshore wind farm

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SgurrEnergy provided lenders’ engineer advisory services to a syndication of lead arranger financial institutions during the pre-financial close and construction monitoring phases of the £1 billion Lincs offshore wind farm, officially opened by Deputy Prime Minister, Nick Clegg in August.

SgurrEnergy, part of Wood Group, began working on the project in 2009 providing a review of project design and key construction contracts, energy yield assessment and other independent lenders’ engineer services. The last of the 75 Siemens SWT-3.6-120 3.6MW wind turbines were connected to the National Grid last week, allowing the Lincs wind farm to begin producing enough energy to power more than 200,000 homes. Lincs is the first project financed offshore wind farm in the UK to be financed pre-completion, and had more than 350 people involved in the construction.

Keith Williamson, project manager for SgurrEnergy’s advisory mandate, said: “The working relationship between Lincs Wind Farm Ltd., the lenders and SgurrEnergy has resulted in the lenders having sufficient confidence to lend to a multi-contract project on a project finance basis.

This was one of the most complex and challenging assignments we have carried out to date, due to the large number of contracts involved, the fact that financial close occurred after construction had commenced, and the various technical and commercial challenges which were encountered during the project financing process and then in construction. It is extremely rewarding to focus our expert due diligence skills on such a high profile project, and play a key role in the financing and delivery of this landmark project.”

SgurrEnergy’s director of advisory services, Simon Luby, said: “This project is a first for the UK industry as traditionally construction was completed prior to project financing taking place. The success of the Lincs project has set a precedent for other UK and multi-contract offshore wind farms to be subsequently financed during, or prior to completion.

This project had the most construction contracts of any offshore wind project financed to date and this meant that more complex and intensive due diligence was required.”

Now that construction is complete, SgurrEnergy’s advisory services team will provide operations monitoring services for the lenders.

Lincs Wind Farm Ltd is a joint venture between Centrica Energy, DONG Energy and Siemens Project Ventures and is operated from a £3 million purpose-built operations and maintenance base in Grimsby, Lincolnshire.

At the opening ceremony, Deputy Prime Minister, Nick Clegg said: “I’m absolutely delighted to open

the Lincs wind farm – a major contribution to ensuring the UK can continue to build on our competitive edge in renewable energy, as well as the UK economy and with the potential to power thousands of homes with clean energy and boost the local economy by bringing jobs to the region.

“I am absolutely committed that we strengthen our position which is why our offshore wind industrial strategy aims to grow UK supply chain manufacturing so that more of the work and jobs can be done here.”

Centrica Energy’s managing director Mark Hanafin said: “Today is a very important day for Centrica and for our joint venture partners, marking the culmination of 10 years’ hard work, determination, and perseverance by the men and women who’ve made Lincs happen.

“My hope is that the offshore wind industry will continue to bring important jobs to this important town, and that projects like this will give confidence to companies that there is a thriving renewables industry in the UK in which to invest.”

SgurrEnergy is a leading engineering consultancy specialising in worldwide renewable energy projects. Founded 11 years ago by technical director Ian Irvine and implementation director Steve McDonald, the company has assessed more than 110GW of renewable energy projects in over 50 countries around the world.

Headquartered in Glasgow, Scotland, SgurrEnergy has international offices in China (Beijing), Canada (Vancouver), India (Pune), France (Paris), Ireland (Dublin), the US (Portland), Brazil (São Paulo), Norway (Stavanger) and Germany (Hamburg).

SgurrEnergy is a subsidiary business of Wood Group.

Wood Group is an international energy services company with around $7bn sales, employing about 43,000 people worldwide and operating in 50 countries. The Group has three businesses – Wood Group Engineering, Wood Group PSN and Wood Group GTS – providing a range of engineering, production support, maintenance management and industrial gas turbine overhaul and repair services to the oil & gas, and power generation industries worldwide.

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