British government agency UK Export Finance hopes to back Irish offshore wind projects as the industry here prepares to spend billions of euro building electricity plants off the east and west coasts.
Four groups whose backers include Australian bank, Macquarie and European energy players, EDF, RWE and Statkraft, have secured contracts to supply electricity from proposed wind farms in the Irish Sea and off the west coast.
According to Joanna Mobed, co-head, global origination, UK Export Finance, the British government agency hopes to aid offshore developers here in raising finance, once they meet its criteria.
The agency supports exports from the UK, including intellectual property, by guaranteeing loans to bankable projects that spend a minimum of 20 per cent of their outlay on goods and services produced there, ensuring its home country benefits from the spend.
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“We complement the banks rather than compete with them,” Ms Mobed explained ahead of addressing a discussion on offshore financing hosted by lawyers DLA Piper and the British Embassy at the solicitors’ firm’s Dublin office.
The agency guarantees to de-risk projects, aiding them in raising finance from banks and other lenders. Along with the minimum spend, projects must be bankable, Ms Mobed stressed.
Consequently, UK Export Finance carries out financial due diligence and weighs organisations’ environmental, social and human rights risks.
The UK is likely to be among the first ports of call for Irish-based offshore developers seeking products and services. The country’s offshore renewable industry is one the most developed globally and as well-established supply chains.
Ms Mobed maintains that this is the time to get involved in the Irish market. “The last year has been pivotal in terms of announcements and developments,” she said.
Rising interest rates and the increased cost of key equipment, including the wind turbines themselves, pose a challenge to offshore projects, Seán McGrenaghan, legal director, DLA Piper, pointed out.
As a result, developments that may have been viable a few years ago may not be so now, he explained.
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Getting planning consent also remains a key risk, Mr McGrenaghan noted.
The Marine Area Planning Act, 2021 now governs offshore development, replacing long-outdated legislation. However, Peter Lefroy, head of offshore development, RWE Ireland, backer of the Dublin Array project, noted that there could still be teething problems with the new legislation.
Phase one offshore developments such as Dublin Array will be the first to test how the 2021 act will work in practice, he pointed out.
