RWE and KKR have completed a £12bn UK infrastructure investment agreement, securing one of the country’s largest renewable energy financing packages through a partnership involving 35 international banks and the National Wealth Fund.
The German energy company and US investment group have reached financial close on Vanguard West and Vanguard East, two offshore wind projects off the Norfolk coast, after completing the formation of their equally owned joint venture.
The agreement includes £11.1bn in cash borrowing facilities and £1.7bn in ancillary facilities, supported by equity commitments from both companies. The financing also incorporates £1bn from the UK’s National Wealth Fund.
RWE will lead development and construction, while KKR provides long-term infrastructure investment capital and financial expertise.
KKR has completed the acquisition of a 50% equity interest in each project, formalising the partnership first announced in January 2026.
The combined developments represent approximately £12bn of investment in construction and associated infrastructure. The separately disclosed £12.8bn financing facilities include ancillary borrowing commitments and should not be treated as an additional £12.8bn of economic investment.
The National Wealth Fund is providing two £500m commitments, one for each development, marking its first participation in the financing of UK offshore wind projects.
The government expects the projects to support more than 2,400 jobs during construction, alongside economic activity involving contractors, engineering businesses, professional services, and infrastructure suppliers.
International capital supports UK infrastructure —
The transaction demonstrates the role of institutional investment and specialised project financing in delivering infrastructure developments requiring substantial capital before they begin generating revenue.
The debt arrangements are structured on a non-recourse basis, meaning lenders primarily rely on the projects’ assets and contractual cash flows for repayment rather than unrestricted claims against their sponsors.
For investors, these structures allow risks to be allocated between shareholders and lenders while limiting financial exposure to the wider operations of the sponsoring companies.
The lending package also benefits from export credit support provided by Germany’s Euler Hermes and Denmark’s EIFO, extending the international financing arrangements beyond conventional commercial bank lending.
Both developments secured 20-year inflation-indexed Contracts for Difference in January, at a strike price of £91.20 per megawatt hour in 2024 prices.
The agreements establish a mechanism for supporting electricity revenues during the contract period, giving financiers greater visibility over future cash flows and helping the developers secure long-term borrowing.
Such arrangements are particularly important for capital-intensive infrastructure, where construction expenditure precedes commercial operation by several years.
The two projects will have a combined generating capacity of approximately 2.8 gigawatts, with RWE estimating that their electricity production could be equivalent to the annual consumption of around three million UK homes.
Preparatory construction activity is already under way, including work on onshore electricity connections and substations.
Offshore construction is expected to begin in early 2027, with both projects scheduled to be fully commissioned during 2030.
The investment also demonstrates how public financing institutions can participate alongside private investors without providing the majority of a project’s required capital.
The National Wealth Fund’s £1bn commitment forms part of the broader lending consortium rather than representing a separate government grant.
With the equity transaction and project financing completed, the joint venture has established the principal financial arrangements supporting construction through to the planned commissioning dates.
