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  • Real Estate
  • 01-03-2019

Market parties have until 5p.m. on Thursday, 14 March 2019 to apply for a permit for construction of the Wind Farm Zone Hollandse Kust (zuid) Wind Farm Sites III and IV. In order to construct these wind farms, the operator must conclude three agreements with the Central Government Real Estate Agency, namely: (i) an agreement (the “Preliminary Agreement”) prior to establishment of the Right of Superficies and conclusion of a Lease Agreement; (ii) establishment of the Right of Superficies and easements for the wind turbines (“Right of Superficies”); and (iii) the Lease Agreement for use of the seabed for the cables between the wind turbines and the TenneT Platform (“Lease Agreement”).

The Wind Farm Zone Hollandse Kust (zuid) Wind Farm Sites III and IV fall largely within the 12-mile zone. The government considers itself to be the owner of that zone. The three agreements to be concluded with the Central Government Real Estate Agency relate to the portions of the wind farms that fall within this 12-mile zone. As regards Wind Farm Sites III and IV, 71.85% and 68.23%, respectively, lie within that zone.

Detailed information about offshore wind farms, including the current tender for the Wind Farm Zone Hollandse Kust (zuid) Wind Farm Sites III and IV, can be found (in both Dutch and English) on the website of the Netherlands Enterprise Agency (the “RVO”).

The final drafts of the Preliminary Agreement, the Lease Agreement, and the Right of Superficies have also been published on that website. The documents are no longer negotiable and can only be supplemented with factual information after tendering. A Q&A has also been published (in both Dutch and English) with the (draft) agreements with the Central Government Real Estate Agency and with the regulations on the granting of permits for offshore wind energy. The most recent versions are dated 28 February 2019.

Here are a few conspicuous points from the Preliminary Agreement, the Right of Superficies, and the Lease Agreement:

  • The Preliminary Agreement is the precursor to the definitive Right of Superficies that will be established after the Permit becomes irrevocable and the exact type of wind turbines and their positions are known. This Preliminary Agreement guarantees an exclusive right to the future issuing of areas of the seabed. Due to the exclusivity, a fee is charged because, in principle, no other use of the seabed is possible once the wind farm permit has been issued. The Preliminary Agreement is the basis for this reservation fee. A preliminary agreement or option agreement is also common in the case of onshore projects, where such an agreement and the associated fee is more obvious because land is easier to use for other purposes.
  • The Right of Superficies will only be established for the foundations of the wind turbines. The Lease Agreement relates only to the obstructed strip where the cables and pipelines will run. No right of superficies is necessary for the cables and pipelines because the Dutch Civil Code provides that they do not become the property of the owner of the seabed by accession.
  • All of the agreements will stipulate that they will terminate by operation of law on the same day that the operator no longer holds the Permit.
  • The Right of Superficies will be established as soon as possible after the Permit has become irrevocable, but no later than one year thereafter. The operator has the necessary draft agreements and the State has no reason for postponing signing. The dates when the fee for the Right of Superficies and the lease fee commence are independent of the signing (establishment) of the Right of Superficies and the Lease Agreement.
  • The obligation to pay a fee for the Right of Superficies for the entire wind farm commences – regardless of when operation of the wind farm starts – on the day when four years have elapsed from the day when the Permit becomes irrevocable. The rent on the basis of the Lease Agreement is a one-off amount and must be paid all at once when the Lease Agreement is signed.
  • Transfer of the Right of Superficies and the Lease Agreement by the Permit Holder will always require written consent. Transferability of the Right of Superficies and the Lease Agreement is included in both Clause 15 of the Right of Superficies and Clause 17 of the Lease Agreement respectively.
  • In the Q&A, the State has confirmed its agreement to the rights of banks/financial institutions to enter into the deed of superficies and the Lease Agreement. In this respect, the same procedure is followed as for onshore wind farms.
  • The Right of Superficies is an independent right of superficies. That is important as regards the funding of the project.

The procedure is open without any subsidy being required. This is the second time that the Ministry of Economic Affairs and Climate Policy has opened a procedure for constructing and operating a wind farm without a subsidy. After the close of the tendering procedure, the RVO will announce whether any applications have been submitted for the permit. If they have not, then a procedure will be opened soon after with the possibility of a subsidy. If applications are then submitted, the RVO will assess them.

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