Lakiakangas 2 onshore wind farm Providing lender’s technical advisor support during the construction phase for the extension of an operational wind farm in Finland

What was the aim of the work?

Lakiakangas 2 is an extension to the original wind farm, and it’s made up of 12 Vestas V-150 4.2MW wind turbines generators (WTGs). It has a 135m hub height and maximum tip heights of 210m. Each WTG is rated at 4.2MW, and the project has an installed capacity of 50.4MW. Construction on the project started in August 2018 with financial close taking place in October 2018. Construction work took just over a year, with takeover by December 2019.

After the completion of the technical due diligence for the financing phase, which Natural Power undertook, we were appointed as the Lender’s Technical Advisor (LTA) for the construction phase of the project. Our role as LTA was to make sure the lender to the project had sufficient independent technical support to understand and manage the technical risks – namely time, cost and quality – associated with the construction of the wind farm.

Through our construction experience of wind farms in the Nordic region and knowledge from the due diligence phase, our engineers provided the lender with advice. This was based on the review of progress on site; monitoring the financial agreement between the project sponsor and the lender to certify the construction budget utilisation, including contingency; and confirming completion of the key milestones of the project. We also had a strong focus on quality and the final takeover of the wind farm, with Natural Power undertaking WTG walkdown inspections on behalf of the lender.

What was the outcome?

Through our role as LTA, the lender had a point of contact for all technical matters during construction, allowing them to make informed decisions relating to the debt they provided to the project.

This was achieved through a detailed due diligence exercise as part of the project financing process. This allowed the lender to understand the risks associated with the project and the sponsor’s proposed mitigation to manage these risks. Our role during the construction phase, which was to make sure the lender had independent technical advice and support as the project progressed and the risk profile evolved, also helped to further reduce and manage these risks.

While wind farm construction in the Nordic region is well established, the climate does present challenges. Dealing with near Arctic conditions during construction needs careful planning and management. The contractors building the wind farm had to deal with large volumes of snow, the thaw season and hot summer conditions. We helped our clients understand the key risks associated with working on a project of this scale and how to manage this.

What did Natural Power do to get this result?

Through our LTA processes and close communication with the sponsor and contractors, we were able to advise the lender on the project progress, budget and risks.

One example of this involved us providing technical advice to the lender on construction concerns with the foundations. We were able to work with the sponsor, OE and their technical specialists to assess the foundation issue so the project could meet very tight and critical completion deadlines to adhere to the Power Purchase Agreement obligations. We reviewed documents and information from the sponsor and the contractor to understand the risk, so the lender could consider how the issue was being dealt with and decide if they needed more support on addressing any of these concerns. This resulted in a programme of works for the foundation remedial works to be undertaken the following summer after completion.

After the commissioning work and reliability testing, we undertook turbine walkdown inspections for all of the turbines before the sponsor took over the wind farm. This allowed us to give the lender an independent assessment of the quality of work on the installation and commissioning of the turbines. We provided the sponsor with our report so they could talk to the turbine supplier about our findings and include them in the snagging process. This allowed all the stakeholders to have an overview of the wind turbines before going into full operation.  

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