MUFG leads financing of one of the world’s largest offshore wind farms

MUFG played a leading role in financing the 1.4GW East Anglia Three offshore wind farm – a flagship project of Iberdrola (via its UK subsidiary, ScottishPower Renewables) and Masdar (the sponsors). As one of the largest projects of its kind globally and considering its complexity, MUFG successfully navigated a range of challenges to help the sponsors secure £3.6 billion to facilitate Masdar's acquisition of a stake in the asset and to fund ongoing construction work.

The Challenge

Located 69km off the Suffolk coast in the UK, East Anglia Three will feature nearly 100 offshore wind turbines that will transmit electricity to the grid. Once operational, it will significantly boost the UK's offshore wind capacity and provide enough clean energy for 1.3 million homes.

To finance the construction of wind turbines, substations, and converter stations, as well as operational and maintenance costs ahead of commercial launch, the project needed to raise £3.6 billion. Masdar initially appointed MUFG as debt advisor to support the financing of its 50% acquisition of the project. As discussions among the sponsors progressed, the mandate evolved into a broader asset-level financing led by Iberdrola, the existing asset owner, who subsequently appointed MUFG and CA-CIB as joint financial advisors to raise the required funds.

The deal took place in a challenging post-pandemic economic environment, at a time when construction was already underway and the project had not originally been intended for a project finance package. With a new investor also on the horizon, this led to a complex set of circumstances which had to be carefully navigated to secure financial close.

Execution

The team advised Iberdrola on amendments to the project contracts to improve their Project Finance (PF) compatibility – a key step in making the project more attractive to commercial lenders.

Throughout the process, the team worked closely with Iberdrola to keep the lender group informed on construction progress and timelines, addressing queries and maintaining confidence in the project's delivery. The team also managed an extensive due diligence process, made more complex by ongoing construction activity.

These steps were critical in securing a competitive £3.6 billion debt package from 24 commercial lenders, including £500 million from the Export and Investment Fund of Denmark (EIFO), as well as a small group of lenders making their first investment in the UK offshore wind market. The market appetite for this under-construction project, backed by two very experienced sponsors, was strong, and the debt financing was 40% oversubscribed.

Bringing together the bank's unique services and products to create bespoke solutions tailored to the project's requirements delivered additional value to the client, with the team:

Playing an instrumental role on the execution and coordination of interest and inflation rates derivative hedging, helping to further de-risk the PF structure;
Providing Iberdrola with a £1.2 billion Construction Bridge Loan to allow it, as the original sponsor, to meet its internal objectives while the final M&A deal terms were agreed with Masdar. This gave Iberdrola the assurances it needed to move ahead with the project and demonstrates MUFG's balance sheet strength and unique approach.

Results

MUFG's deep sector expertise, strong sponsor relationships, and proactive approach were instrumental in enabling Iberdrola to successfully achieve financial close in July 2025. The new funds will enable the project to progress to the next stage of development, with operations expected to begin in the fourth quarter of 2026.

The East Anglia Three deal demonstrates MUFG's ability to structure and execute complex, large-scale offshore wind project financings under challenging conditions and reinforces its commitment to supporting the global transition to clean energy.

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