The three partners behind Denmark’s “energy island” project to build a physical base for large-scale wind-power production in the North Sea today announced a cooperation pact with mortgage-bond specialist Nykredit to probe financing options.

A consortium of PensionDanmark, PFA and the energy and fibre optic network firm Andel - known as SEAS-NVE before last August - agreed in May 2020 to finance and operate a planned energy island called “VindØ” (wind island), which is to be the base for up to 10GW of offshore wind turbines.

The renewables initiative is part of a government plan to realise the concept of a single structure in the sea, rather than individual offshore wind farms, which would be connected to several countries’ electricity grids as well as to surrounding offshore wind farms.

The idea is for the energy islands to be established without state funding.

Torben Möger Pedersen, chief executive officer of PensionDanmark, said: “We in the VindØ consortium are really pleased that Nykredit is now joining the collaboration on the energy island in the North Sea.”

This was partly because as a mutual company, Nykredit fit in well with the VindØ team, he said, and partly because it enabled the consortium to secure a comprehensive Danish financing solution for the “world’s first energy island”.

PensionDanmark said Nykredit was expected to contribute to the planning of the capital and financing structure behind the project, as well as providing a significant part of the debt capital based on the issuance of mortgage bonds - which the pension fund said suited the VindØ consortium’s long-term investment horizon.

Michael Rasmussen, Nykredit’s CEO, said Denmark was to be a “green pioneer” in the future too.

“So we have a strong desire to bring our competencies into play and show the world how with unique Danish mortgage financing can support the development of the world’s first energy island,” he said.

The consortium has said it will initially invest up to DKK400m (€34m) to develop the project.

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