Oct. 28--Centrica today pulled off the world's biggest wind-power refinancing deal in a joint venture between private equity and banks that is set to become a model for the industry.

The £460-million package enabled the owner of British Gas to announce a £725-million investment in an offshore wind farm at Lincs, off the coast of Skegness and next to its existing wind plants, that it will start building next year.

The energy giant said that £84 million of the £460 million wind-farm investment had come from selling a 50 percent stake in its three wind-farm assets at Lynn, Inner Dowsing and Glens of Foudland to US private equity group TCW. The rest came from a consortium of banks.

With a new financing pattern crucially needed to forge the future development of Britain's renewable energy needs, experts said the deal -- the first time that a private equity group has co-invested in a wind energy asset with banks -- was set to become the industry standard. German giant RWE is said to be considering a similar deal.

The energy industry watchdog Ofgem last week said that energy firms would have to spend up to £200 billion over the next 25 years on infrastructure such as new power plants, energy storage facilities, and increased use of renewable energy to ensure the UK can meet its targets to cut carbon emissions and secure future energy provisions.

It warned that homeowners would end up footing the bill over the next 10 to 15 years but if Centrica's joint venture works out it could raise hopes that such deals may lower the burden on consumers.

Guaranteed income packages -- where in this case British Gas has a 15-year power purchase agreement to buy all the energy produced at the wind farms -- makes the joint venture attractive to investors.

Sarwjit Sambhi, head of power generation at Centrica said: "To meet the renewable target, a huge investment is required -- around £60 billion just for offshore wind. Other investors had to be bought on board, and here our new equity partner will set an important benchmark for the industry. This is also the first significant financing for offshore wind -- it sets the standard in investing debt."

Centrica's new wind farm at Lincs will also give the firm access to state subsidies that were designed to boost investment in offshore wind energy. In April the Government announced a temporary increase in the renewable obligation certificates (ROCs) awarded to offshore wind generators from 1.5 to 2 per megawatt hour, to help the UK reach its target of generating 40 percent of UK energy from renewable sources like wind by 2020.

Centrica said that its newest wind farm in Lincs would start generating power by the end of 2012.

It is also trying to speed up plans to place orders for another two giant offshore wind parks in the North Sea before the end of March. Doing so would allow it to qualify for extra subsidies that could be worth hundreds of millions of pounds. The two projects, off the Norfolk coast at Race Bank and Docking Shoal, are forecast to cost about £1.5 billion each but if planning permission is granted before 31 March, Centrica would receive Government subsidies for up to 25 years, massively boosting potential earnings from the projects.

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