Talanx finances €1.17bn offshore wind farm

German insurance group Talanx has coordinated €832 million of senior bond financing to the Borkum Riffgrund 2 offshore wind farm to boost yields in the current low-interest rate environment.

Talanx acted as lead manager for a double-digit group of institutional investors ranging from six countries across Europe. The debt enabled Global Infrastructure Partners (GIP) to acquire a 50 percent share in the wind farm owned by Danish energy supplier Ørsted (formerly DONG Energy) with a transaction value amounting to €1.17 billion. GIP is a global, independent infrastructure investor.

The transaction comes after Talanx led the financing for the Gode Wind 1 offshore wind farm in 2015.

"With the financing of Borkum Riffgrund 2, we continue to consistently pursue our strategy of increasing the share of infrastructure investments in our portfolio,” said Immo Querner, chief financial officer of Talanx AG. “In doing so, we aim to counter the decline in yields resulting from the persisting low-interest rate environment.

"We expect new investments in infrastructure transactions to amount to €300 million in equity and debt in 2018. Overall, we consider five billion euros of investments in infrastructure achievable," Querner added.

Borkum Riffgrund 2 comprises the construction of 56 wind turbines with a combined output of 450 megawatts. With this capacity, it is set to provide power for around 460,000 homes. The turbines will be installed approximately 30 km north of Borkum, with technical completion planned for 2019.

Hannover-based Talanx operates as a multi-brand insurance provider with a focus on business to business (B2B) insurance under brands including HDI, Targo and Hannover Re.

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