National Wealth Fund backs Orkney Islands Council’s community wind farm project

The 28.8MW wind farm will generate electricity which will be exported on to the national grid, supplying green energy to homes and businesses in support of Scotland’s and the broader UK’s clean energy ambitions. By exporting the energy, the project will also - provide a source of income for the council.

The £62.1 million debt facility, provided through its Local Authority Advisory and Lending team, will cover the cost of the project build. 

The project – in development since 2019 – was unanimously backed by elected members in February this year and will see six 149.1m turbines built at the site in St. Ola, situated between Kirkwall and Finstown.

It is forecast that the project will generate average annual surpluses of more than £3m (in today’s money) for the council, providing a revenue stream to protect and develop public services – accumulating an expected £120m over a 25-year term.

The wind farm will also support the delivery of the Scottish and Southern Electricity Networks (SSEN) interconnector cable, which will be used to transport the electricity to the Scottish mainland.

In addition, the project will provide a £144,000 annual location specific community benefit scheme for community driven projects – 60% of which is planned to go to Kirkwall and St Ola Community Council as the host community, with the remainder being split amongst the remaining 19 community councils. 

The NWF loan provided to Orkney Island Council, provides low-cost, flexible and long-term financing for the community wind farm, meaning no further draw from the Council’s Strategic Reserve Fund (SRF) is required to deliver the project – with an option to return funds spent to date back to the SRF through the loan.  

Chancellor of the Exchequer, Rachel Reeves, said: “We are investing in Britain’s renewal, and this loan will provide clean energy for homes and businesses to strengthen Scotland’s energy security for years to come.

“This is just one of billions of pounds worth of investments being announced today at our Regional Investment Summit, reversing decades of underinvestment and decline, slashing red tape to open up opportunities for businesses and kickstarting economic growth in every corner of the UK.”

Lorna Pimlott, National Wealth Fund managing director, local authority advisory & lending, said: “Not only will the Quanterness wind farm help to maximise Orkney’s natural resources to support key public services and projects for local people but this important project will allow the Council and the community to contribute significantly to Scotland’s, and the broader UK’s, clean energy ambitions. Furthermore, delivery of the windfarm will help create employment and investment opportunities across Orkney and the wider region.”

Councillor Heather Woodbridge, leader of Orkney Islands Council, said: “This is the latest stage in what is an immense project for our Council, not only in its scale and ambition but also in its transformative impact on our community and the services we provide.

“Elected Members unanimously backed the project at the start of this year – which is testament to the importance of the project in securing the future stability of public services in Orkney. The Quanterness project – as well as supporting the interconnector – will provide the Council with much needed income to support vital council services.

“In our discussions with our community they have been consistently clear that they hugely value the services we provide, and they want to protect them. In order to achieve that community aspiration this Council must explore all opportunities available to us – and the Quanterness wind farm is a great example of that.”

For more information on the NWF’s Local Authority offer visit the website.

In August contracts were awarded following a procurement process to Nordex for the design, supply, transport, installation, and commissioning of the turbines and a Maintenance Service Agreement for 25 years of operations and maintenance service.