Moray West is situated 22km off the coast of the Moray Firth and is anticipated to provide half of Scotland’s electricity supply by 2025. With enough capacity to power approximately 1.33 million households, the project, part of the Ocean Winds portfolio, also aims to reduce CO2 emissions by roughly 1.1 million tonnes.

The £95.5m loan from Barclays will support the project’s construction and supply chain activities, enabling installation works to begin later this year. Barclays also acted as a standalone pre-hedge executor, implementing interest rate, inflation and foreign exchange hedges to safeguard the project amidst a volatile macroeconomic environment.

Pete Geddes, project director at Moray West, said: “The support of Barclays has contributed to Moray West reaching financial closure. This means we are now on track to commence the next phase of the project which will see the installation of the wind farm start in late 2023.

“Our close working relationship with Barclays has given us the support required to progress the project and help to meet the UK and Scottish government renewable energy targets.”

Barclays is one of seven banks which have supported two project-financed offshore wind farms involved in the Contract for Difference allocation rounds in the UK looking to innovate with sophisticated offtake agreement strategies.

It executed the hedges at the point the project was awarded the Contract for Difference in July 2022 and then syndicated them to the lending banks at financial close. Barclays has particular expertise around the inflation hedge which is highly illiquid, however it is able to place on the back of its first in class distribution platform.

Jamie Grant, managing director of Barclays Corporate Banking in Scotland, added: “Barclays expertise and sophisticated approach to the financing of such a major development in Scotland’s green economy reinforces our ability to support key clients in the renewables sector which look to innovate with revenue offtake strategies.

“With the commodity cost escalations that have been experienced recently, it is likely that more renewable developers will also consider innovation with their offtake strategies and we are well placed to support projects like Moray West.”

The deal team was led by Neil Fleming, infrastructure and project finance director at Barclays Corporate Banking.