UK energy group Centrica, the parent company of British Gas, has announced it has received investment approval for the construction of a wind farm project off the coast of Lincolnshire.
Construction of the Lincs 270 megawatt wind farm will begin in 2010, with production expected to start in 2012.
The site is located eight kilometres offshore from Skegness, adjacent to the companyÔÇÖs existing Lynn and Inner Dowsing wind farm developments.
The total cost of the project is expected to reach £725 million.
When completed, Lincs will consist of 75 3.6 megawatt Siemens turbines, bringing the total capacity of the operating projects in which Centrica has equity interests to 650 megawatts.
Through British Gas, Centrica will enter into a 15-year power purchase agreement to off-take all of the electricity production.
The site will be capable of generating electricity for around 200,000 British Gas customers.
The company has also agreed the sale of 50 per cent of its equity stake in the Lynn, Inner Dowsing and Glens of Foudland wind farms to US-based investment management company TCW, for £84 million in cash.
Centrica is entering into a joint venture agreement with TCW that will govern their ongoing relationship as co-owners of the three wind farms.
Commenting on the announcement, Sam Laidlaw, CentricaÔÇÖs CEO, said: "Our decision to build Lincs illustrates our continued commitment to develop renewable generation and confirms our position as one of the UK leaders in green energy.
ÔÇ£The GovernmentÔÇÖs enhanced financial framework for offshore wind has been fundamental in improving the overall project economics of this development.
ÔÇ£The refinancing and equity sale of part of our existing wind portfolio underlines the quality of the operational assets and creates a structure for recycling CentricaÔÇÖs capital and mobilising third party funds efficiently.
ÔÇ£This is a milestone in our renewables strategy and we look forward to working together with TCW who bring significant global expertise in energy investments,ÔÇØ he concluded.
The deal on the projectÔÇÖs finance is expected to close in November and the equity sale is predicted to close before the end of the year.
Centrica has also submitted planning consent applications for the 540 megawatt Docking Shoal wind farm and the 640 megawatt Race Bank wind farm, which are both situated in the Greater Wash area.
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