Our Corporate Energy team has advised the shareholders of FI1 Limited on the sale of their stake in the project companies that will construct and operate the first ever UK-Germany Transmission Link – the NeuConnect Interconnector Project (NeuConnect) - to TEPCO Power Grid (TEPCO PG), which has just been announced.
The shareholders of FI1 founded and originated NeuConnect through their development vehicle Greenage Power Limited and, together with Frontier Power, provided early-stage development support to NeuConnect. NeuConnect has a transmission capacity of 1.4GW and will see two new HVDC Converter Stations built on the Isle of Grain in the UK and the Wilhelmshaven in Germany, connected by over 700km of subsea cables through the UK, Netherlands and Germany. Work will begin this year with major construction to lay subsea HVDC cables and build HVDC converter stations. The NeuConnect Interconnector will create the first direct power link between Germany and the UK, connecting two of Europe's largest energy markets for the first time.
With both the UK and Germany committed to achieving Net Zero, NeuConnect will enable both countries to trade fluctuating output from intermittent renewable electricity generation. As well as benefitting domestic and industrial electricity consumers in the UK and Germany, this project is forecast to result in a net reduction in carbon emissions of 13 MtCO2 over 25 years. In addition, NeuConnect will make an increasingly needed contribution to enhancing the energy resilience and the energy security in both countries.
Gowling WLG's Corporate Energy team, comprising partner and co-head of the firm's Energy Sector Group, Gareth Baker and senior associate Chelsie Taylor led the transaction with diverse support coming from Hannah Gough (Corporate), Nath Curtis and Dan O'Donnell (Project & Infrastructure Finance), Catherine Naylor (Dispute Resolution Group) and others. Andreas Woelfle, the head of our corporate practice in Germany, led on the German aspects of the transaction, working with legal director Florian Holfeld.
Iain Cameron, an original shareholder of FI1 commented: "This was a complex transaction – running a divestment process working alongside the NeuConnect project as it worked towards a £2.4 billion (EUR 2.8 billion) financial close. I'd like to thank the Gowling WLG team for all of their hard work, responsiveness, collaborative approach, sector knowledge and insightful support in helping us to close this transaction."
Commenting on the deal, Gareth Baker said: "This is a standout transaction in every sense – a unique asset that attracted a lot of attention from a high quality field of bidders. NeuConnect is one of the most significant energy projects under construction in Europe and we're both delighted and proud that the FI1 shareholders put their faith in us to support them with this divestment."
Gowling WLG's multi-disciplinary Energy team has a market-leading reputation and operates seamlessly around the globe. This deal is another example of the team's position in the energy sector and follows a series of mandates, including advising HydrogenOne on its investment in Gen2 and its joint investment in Cranfield Aerospace Solutions and advising Berenberg on its £210 million Harmony Energy Income Trust IPO.
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