Wind farm consortium applies for £1bn London Array loan

The London Array consortium, which plans to build the world's largest offshore wind farm in the Thames Estuary, has applied for a £1bn loan from the European Investment Bank.

The consortium announced it was to proceed with the £1.9bn project in May, after a series of delays sparked by Shell's exit from the group last year.

The current consortium consists of Denmark's Dong Energy, which holds a 50 per cent stake, E.ON of Germany, which has a 30 per cent stake, and Abu Dhabi's Masdar investment group, which holds the remaining 20 per cent.

The group said in a statement: "The London Array consortium can confirm it is in discussions with the European Investment Bank about possible financing for the project. This is simply one of a number of options we have with regard to financing for the London Array."

Work began last month on a £60m onshore electricity substation that will receive power relayed from the Array, and while construction of the turbines themselves will not begin until 2011, the consortium has been busy laying the groundwork for installation.

Earlier this year, Dong Energy signed a contract with Siemens for the purchase of up to 500 wind turbines, while last month the company bought A2SEA, the only major supplier of specialised vessels capable of installing offshore wind turbines in Europe.

The first phase of the project will see some 175 turbines producing 630MW of electricity by 2012. The second phase, which would cost an extra £1bn, would see the total capacity rise to 1,000MW.

The consortium estimate the Array will eventually contribute seven per cent of the renewable energy needed to reach the government's goal of providing 15.4 per cent of all electricity supply from renewable sources by 2015.

A spokesman for the EIB said: "All we can say is that the project is under appraisal currently and we cannot give details on a potential timeline yet."