UK investment bank buys wind farm stakes

London - Britain's government-funded bank investing in green energy projects has acquired stakes in two offshore wind farms owned by Denmark's Dong Energy and Germany's RWE Innogy, respectively, for nearly £500m.

The UK Green Investment Bank (GIB), working with £3.8bn in capital provided by the government, has purchased a 50% stake jointly with Japan's Marubeni in Dong Energy's planned Westermost Rough offshore wind farm off the east cost of England.

The partners acquired the stake for £500m, of which the UK state-funded bank is providing £241m, the GIB said in a statement.

The bank also announced a 10% stake purchase in RWE Innogy's Gwynt y Mor project, the largest offshore wind farm under construction in Europe, for £220m.

The GIB said Dong Energy and RWE's proceeds from the sales would be re-invested in Britain's renewable energy market.

Britain's business minister Vince Cable said the bank had now invested more than £600m in five offshore wind farms.

The bank's participation is a shot in the arm to Britain's offshore wind sector which has seen a series of project cancellations over the past months.

Last week, British utility SSE announced it was shelving two planned offshore wind projects and reduce its stake in a third to cut costs.

Britain, which is the world's largest offshore wind market, is counting on the development of other wind farms to help it cut carbon emissions in the electricity sector.

Turbine installations could reach 3 000 by the end of the decade, compared with 1 075 turbines now. Some 2.5 gigawatts of offshore wind capacity has gone through planning and could be added to the grid in coming years.