DONG Energy and Siemens Project Ventures to join UK offshore wind farm project

DONG Energy and Siemens Project Ventures (SPV), a Division company of Siemens Financial Services, have signed a Joint Venture contract to acquire a 50 percent stake of the offshore wind farm project Lincs, currently owned by UK energy company Centrica, against payment of 50 percent of the incurred development costs, currently estimated to EUR 55 million (GBP 50 million).

The parties will acquire the 50% stake in the wind power Lincs project through an equally owned company. Completion of the transaction is expected in January 2010. DONG Energy’s and SPV’s aggregated 50 % share of the project represents a capital investment of approximately EUR 417 million (approximately GBP 375 million). The estimated investment level is net of anticipated proceeds from the disposal of assets under the offshore transmission regime (OFTO).

The Lincs wind energy project, which has a permitted capacity of up to 270 MW, is situated eight kilometres off the coast of the town Skegness, Lincolnshire, in eastern England. The project is currently in the final design and procurement phase. Construction of the project is expected to commence in the late summer of 2010, with commissioning scheduled for 2012. Centrica will continue to own 50% of the company and will be the leading partner of the project.

It is anticipated that the wind farm will be capable of meeting the annual electricity needs of 200,000 households and would significantly reduce carbon emissions.

“Lincs is an attractive project that will benefit from the UK Government’s enhanced financial framework for offshore wind. The project is well suited for using the newest technology within offshore wind turbines. At DONG Energy, we look forward to broaden and strengthen our collaboration with Centrica,” says Anders Eldrup, Chief Executive Officer of DONG Energy.

“This investment is a logical step in further strengthening our environmental portfolio by providing yet another good example for the combination of sustainable technologies with economic efficiency”, says Johannes Schmidt, CEO Equity Investments & Project Finance of Siemens Financial Services. “Centrica is a leading developer of offshore wind energy in UK and we welcome the opportunity to working together on sustainable technologies.”

In fiscal year 2009, Siemens’ environmental technologies generated revenue of nearly €23 billion, roughly 30% of the company’s total. By 2010, the company intends to increase the share of environmental technologies to around € 25billion.

Together with renowned partners, Siemens Project Ventures (SPV) has with equity capital contributions been involved worldwide in the development of infrastructure projects, particularly in the energy, transport and telecommunication sectors. SPV has already participated in the development of 11 international power plant projects with an overall capacity of more than 7.000 MW as well as in three telecommunication projects, two medical centers and an airport, with a cumulative project volume of 7 billion USD. SPV is a Division company of Siemens Financial Services GmbH (SFS), an international provider of financial solutions in the business-to-business area. With about 1,900 employees and an international network of financial companies coordinated by Siemens Financial Services GmbH, Munich, we support Siemens as well as non-affiliated companies, focusing on the three sectors of energy, industry and healthcare. We finance infrastructure, equipment and working capital and act as a competent manager of financial risks within Siemens. By leveraging our financing expertise and our industrial know-how we create value for our customers and help them strengthen their competitiveness.

DONG Energy is one of the leading energy groups in Northern Europe. We are headquartered in Denmark. Our business is based on procuring, producing, distributing and trading in energy and related products in Northern Europe. We have approximately 6,000 employees and generated more than DKK 60 billion (EUR 8.2 billion) in revenue in 2008.

Centrica is a leading integrated energy company, operating in the United Kingdom and North America. It secures and supplies gas and electricity for homes and businesses, offering a range of energy solutions and services.