Broken Cross is currently being constructed in South Lanarkshire and will comprise of 9 turbines, with a total planned capacity of up to 43.2 MW. The total financing volume for this project is around £40 million. As recently announced, a 6-year PPA for the project was signed between SmartestEnergy Limited and BayWa r.e.
The Broken Cross Wind Farm site was previously an opencast coal mine, making it a perfect example of the UK’s transition away from fossil fuels to sustainable sources of energy. Throughout the construction of the wind farm, preserving and restoring the land was prioritised to provide habitat to a variety of local flora and fauna.
Broken Cross Wind Farm will provide an annual community benefits package of £5,000 per installed megawatt. This equates to £216,000 per year indexed linked to be shared between the communities of Coalburn, Lesmahagow, Douglas Water and Rigside. This will amount to circa £5.4 million during the operational lifecycle of the development.
Christine McGregor, Managing Director at BayWa r.e. UK Ltd., said:
“We are delighted to partner with NatWest for the long-term financing of the Broken Cross Wind Farm, and proud of the BayWa r.e. team that keeps on delivering projects of this calibre. Reaching financial close represents an important milestone, demonstrating that Scottish onshore wind assets, such as Broken Cross, persist to be attractive investments propositions. Scotland is an incredible source of onshore wind energy for the UK, and we are committed to supporting the government’s net zero ambitions, by providing more clean energy to UK households and businesses.”
Lyudmil Banev, Project Finance Director at NatWest, said:
“We are delighted to have supported BayWa r.e. as sole lender, arranger and hedging bank for this transaction. The deal demonstrates NatWest’s continued commitment to the UK renewable energy sector and our capability in UK wind in particular, as well as our ability to deploy our balance sheet effectively and flexibly to underpin important transactions for the market on a sole lender basis. We work closely and creatively with our clients to navigate new frontiers in order to support the energy transition – in this case we enjoyed collaborating with the BayWa r.e. team to repurpose an opencast coal mine. NatWest Group has committed to providing £100 billion of funding by 2025 to support the UK’s transition to a net-zero economy and this investment represents another step forward in our aim to help businesses reduce their carbon emissions and take advantage of the growth opportunities associated with a low carbon economy.”
The construction on the wind farm commenced in October 2022. Currently, turbines are being installed on site and the wind farm is planned to be commissioned this year. Finance arrangements will remain in place through the construction and operational phases of the project.
The project financing was supported by legal advisers Shepherd and Wedderburn LLP, who acted for BayWa r.e., and DLA Piper UK LLP, who acted for the funder. The transaction was also supported by Wood and QMPF.
