Enbridge Inc. recently announced it has agreed to acquire a 50-percent interest in Éolien Maritime France SAS (EMF), a French offshore wind development company, for an investment of $282 million inclusive of transaction costs and past and future pre-final investment decision (FID) development costs. EMF will be co-owned with EDF Energies Nouvelles (EDF EN), a subsidiary of Électricité de France S.A. (EDF) dedicated to renewable energy.
Enbridge and EDF EN will co-develop three large-scale offshore wind farms off the coast of France that will produce a combined 1,428 MW of power. Development of the three projects is already underway, however, construction is subject to FID and regulatory approvals.
“This is a unique and strategic opportunity for Enbridge to further grow our investment in renewable power and build on our existing presence in European offshore wind generation,” said Al Monaco, president and CEO of Enbridge. “This investment in EMF advances our priority to build new business platforms that will extend and diversify growth. The EMF development opportunities are underpinned by strong market fundamentals and a commercial framework that is well-aligned with our low-risk business model. Once fully operational, they are expected to generate attractive returns and accretion to available cash flow from operations.”
Each of the three wind projects has been awarded a 20-year power purchase agreement (PPA) pursuant to which EDF, the power off-taker under the PPAs, will pay an indexed fixed price for 100 percent of the power generated by each facility, through which EMF will also be significantly insulated from variances in wind capacity. These three projects are in an advanced stage of development with a permitting process close to completion, as well as significant technical and environmental studies already performed. Front-end engineering and design have been completed, construction contracts have been tendered, and bids have been received.
The following are the three projects under development by EMF:
1. 498-MW Eoliennes Offshore des Hautes Falaises offshore wind farm located off the coast of Fecamp, France
2. 450-MW Eoliennes Offshore du Calvados project located off the coast of Courseulles-sur-Mer, France
3. 480-MW Parc du Banc de Guerande project located off the coast of Saint-Nazaire, France
Subject to Enbridge taking positive FID on each project individually, it would potentially invest up to $4.5 billion in total for all three projects. Should the projects achieve FID, construction would start gradually from 2017 and continue on through the next five years through 2022.
The initial investment in EMF was included in Enbridge’s secured growth program and will be funded from available liquidity. No incremental equity funding will be required. The incremental equity and debt required to construct the projects will be sourced once FIDs have been made. EMF is pursuing non-recourse project-debt financing for the debt component of the investment.
Enbridge is the co-owner, along with EDF Energies Nouvelles’ Group, of four operating onshore wind projects in North America.
Enbridge has interests in 24 renewable energy facilities that are either operating, secured, or under construction with a net generating operating capacity of nearly 2,000 MW. The projects in operation produce enough gross power to supply power to more than 750,000 homes. During the past decade, Enbridge has invested nearly $5 billion in renewable power generation and transmission.
For more information, go to www.enbridge.com.