Iberdrola has signed green financing agreement with 24 banks for the East Anglia THREE offshore wind farm, being developed together with Abu Dhabi Future Energy Company (Masdar).
The transaction valued at $4.88 billion, which was 40% oversubscribed, is one of the largest of its kind to date and will cover a substantial part of the total investment in the project, estimated at approximately $6.08 billion.
The financing will be provided through green project finance, which is a financing structure for large projects in which the loan is granted mainly on the basis of the future income that the project will generate.
In other words, the money is repaid with the cash generated by the project once it is up and running, all underpinned by confidence in the shareholders' long-term management of the asset.
The financing consists of senior debt (approximately 70%) and capital contributed by the shareholders (the remaining 30%), and is backed by long-term power purchase agreements (CfDs and PPAs), which provide investors with certainty regarding future revenues. Construction has also been supported by a bridge loan granted by MUFG and Crédit Agricole.
The funds obtained will be used to cover the construction costs of the wind turbines, substations, submarine cables and converter stations, both onshore and offshore. The operating and maintenance costs prior to commercial operation, scheduled for the fourth quarter of 2026, will also be financed.
The project's revenue will be backed by long-term contracts - CfD (Contracts for Difference) awarded by the British Government and a long-term power purchase agreement (PPA) signed with Amazon in 2024. This combination ensures high revenue visibility over the life of the project.
Earlier in the week, Iberdrola and Masdar agreed to co-invest $6.08 billion that amount to develop the 1.4 GW offshore wind farm, located off the Suffolk coast.
The offshore wind farm will feature 95 Siemens Gamesa wind turbines of 14.7 MW each, generating clean energy for more than 1.3 million homes, once fully operational at the end of 2026.