RWE Innogy near 1.3 billion-pound UK Galloper wind park deal

By Christoph Steitz FRANKFURT (Reuters) - Germany's RWE is close to striking a financing deal for its planned 1.3 billion-pound Galloper UK offshore wind park project, according to one of its executives, as its expansion in renewable energies gathers pace. RWE, Germany's largest power producer, came late to the boom in solar and wind capacity, which has turned the utility sector upside down by replacing the coal- and gas-fired power plants that make up most of RWE's portfolio. Innogy, RWE's renewables unit, has about 3.6 gigawatts (GW) of installed capacity and a project pipeline of 3.5 GW. This compares with RWE's total capacity of about 50 GW. If completed, Galloper, to be located about 27 kilometres (17 miles) off the coast of Suffolk in eastern England, would add a further 336 megawatts (MW). "The plan is to have a deal in autumn, either October or November," Hans Buenting, Innogy's chief executive told Reuters, adding it was planning a cooperation with three partners, whom he said he was not authorised to name. If the deal goes ahead as planned, RWE would hold a 25 percent stake in the project, which it says has the potential to generate enough energy for thousands of British homes. RWE was dealt a blow last year when its initial partner for Galloper, British utility SSE, dropped out of the project in a bid to cut costs. Unable to shoulder on its own the costs involved, RWE is banking on partners for offshore wind parks, which usually carry a price tag of 1 billion euros upwards. "Investors expect return on equity in the low double-digit percentage range when investing in offshore projects, between 10-20 percent," Buenting said. He added that there was a "certain saturation" in European markets, which forces Innogy to look for growth in other markets, calling the Middle East an option. RWE has been in talks with the United Arab Emirates green energy firm Masdar for months about potential joint renewable energy projects, a source told Reuters in June, but Buenting poured cold water on speculation that any investor would be taking a stake in Innogy. "At the moment, we are only inviting partners on a project level, not on a group level," he said. "And I have no knowledge that this should change," (Editing by Georgina Prodhan and William Hardy)