Fid Financial Close

Centrica reached an internal investment commitment for the Lynn offshore wind farm as part of a wider generation build-out that also included the Inner Dowsing offshore wind farm, the Langage CCGT plant and the Braes of Doune wind farm. In its 2006 preliminary results announcement, the company reported that the award of the main construction contracts for the two 90MW offshore wind farms at Inner Dowsing and Lynn was almost complete, with first power from this combined project expected in late 2008. This shows that by early 2007 the projects had effectively moved out of development and into execution, with major contracts substantially placed and a delivery timetable defined. [2] By the time of Centrica’s interim results analyst-call transcript dated 2 August 2007, the company described Langage, Lynn and Inner Dowsing as three large-scale construction projects already underway. It stated that during the first half of 2007 it had invested £120 million in these projects and was committed to a further £500 million of capital over the next 18 months to bring them to completion. This explicit forward commitment of substantial funding across the portfolio implies that the board-level financial decision enabling full construction of Lynn had been taken and that the project was fully financed on Centrica’s balance sheet. For Lynn, this meant that capital for remaining construction and commissioning activities was secured, supporting progress towards the late‑2008 first power target. [1,2]