Finance, tax & support schemes

Tax regime

Power production and infrastructure projects usually involve significant investments, high risk and often several years of negative cash flow. This requires competent handling of capitalization vs. cost, tax profit/loss consolidation, VAT administration, tax processing of financial structures and interest costs, and tax incentive schemes. This is especially the case for joint venture structures and/or cross-border constellations.

The current tax regime does not regulate offshore wind specifically, which means that Norwegian companies will be liable to tax in accordance with the general tax rules. On February 21, 2022, the Ministry of Finance proposed a change in the Norwegian Tax Act, widening Norway’s taxation right on the Norwegian continental shelf to cover foreign companies’ income from production of energy from renewable resources, including offshore wind. The new rules are likely to enter into force from 2024, implying that foreign companies will become subject to the same tax rules as Norwegian companies.

A “super-profit tax”, also called a ground rent tax or resource rent tax was introduced for land wind with effect from 2023. The Government has stated that they have no intention of introducing any similar tax on offshore wind.

In addition to producing power for ordinary consumption, offshore wind projects are expected to produce power for electrification of petroleum installations on the Norwegian Continental Shelf.

For offshore wind projects that are linked to petroleum production, i.e. to provide electricity to petroleum installations, the MPE will decide depending on the degree of affiliation if the petroleum tax regime will apply. For the sake of clarity, the companies may from an early point on, for example prior to the investment decision, request a statement from the tax authorities about the processing of a specific project.

The special tax incentives for new investments on the continental shelf, together with the ever-increasing CO² tax associated with the operation of gas turbines at the installations in the North Sea, will increase the petroleum companies’ demand and willingness to pay for power from offshore wind.

Financing

In order to be able to finance the development and construction of the proposed and future offshore wind farms, it is vital that the project companies are able to provide adequate security to the financial institutions financing the project. Without external debt project financing of the projects, it is unlikely that any stakeholder can or will finance an entire project solely on their balance sheet.

In offshore wind project financing, the most suitable assets which can be used as collateral are the turbines/assets/installations, the licenses, and perhaps the cashflow under a PPA or CfD (if applicable).

Unfortunately, there are currently no legal grounds for the pledging of offshore wind assets as security in Norway. The consequence is that under the current legislation, it is not possible to establish security in offshore wind installations or licenses in Norway.

Unlike onshore wind, where the land, assets and cashflow easily can be pledged based on existing legislation, no applicable legislation has been adopted that permits pledging of the assets of an offshore wind project company.

In the petroleum industry however, the Petroleum Act and the security legislation have been adapted so that pledges may be granted over licenses, rigs and other installations, which makes it significantly easier to secure financing and get access to capital.

The MPE is currently considering whether it will open up for pledging of offshore wind installations and/or licenses, in order to facilitate for project financing of offshore wind projects. The MPE will be assessing the need for legal grounds for pledging and the possibility of establishing a register for rights in facilities for offshore renewable energy production, similar to the corresponding register for petroleum related pledges.

Several stakeholders have pointed out that the possibility of pledging facilities and/or licenses will be crucial in terms of financing.

Support schemes and subsidies

The Norwegian state has introduced two different types of support schemes for offshore wind: a Contract for Difference (CfD) for bottom-fixed offshore wind in Sørlige Nordsjø II, and investment support for floating offshore wind in Utsira Nord. Both schemes have been approved by ESA as compatible with state aid rules.

Sørlige Nordsjø II

The support scheme for Sørlige Nordsjø II is a two-way CfD. The CfD will remain in force for 15 years from operationality of most of the project, with a maximum level of support of 23 billion NOK.

Ventyr won the auction with 115 øre per kilowatt-hour, and signed the CfD in April 2024. Ventyr’s winning bid will be the ‘strike price’ in the CfD between them and the Norwegian state, while the ‘reference price’ is the average of all spot prices in a month.

Some central provisions of the CfD for Sørlige Nordsjø II include minimum requirements for the beneficiary, including sustainability and positive ripple effects, especially development of the supplier industry.

Utsira Nord

Utsira Nord is planned to be awarded to three successful applicants based on qualitative criteria. The project areas must each have a minimum of 460 MW installed capacity and a maximum of 500 MW. 

The support scheme for Utsira Nord will be in the form of an investment support scheme. The current August 2025 revision is structured as a one-off state grant, with a fixed cap per MW and a total limit of 500 MW installed capacity. The grant is provided exclusively for actual and necessary investment costs related to establishing the wind farm and grid connection, with a maximum level of support of 35 billion NOK. Key takeaways from the current revision:

Support payments are split: up to 10% can be paid after recipients’ final investment decision, upon documentation of equivalent costs incurred. The remaining amount will be paid after project completion and approval of audited project accounts.
Costs eligible for support are only those assessed as necessary at the time they are incurred for the establishment phase; ongoing operational or superfluous costs are not covered.
The support scheme is indexed for inflation according to the Norwegian consumer price index (CPI) up to the relevant payment milestones.
Where market prices for non-contracted output exceed a certain threshold (“reference price”), 50% of any surplus revenues are to be shared with the state for a period of 15 years after completion. This mechanism is similar to that of a one-way CfD.
Developers are responsible for all remaining investment and operational costs, as well as all risk and responsibility for ownership and operations after completion
Beneficiaries must provide guarantees totaling NOK 2 billion, with minimum NOK 1 billion as a bank guarantee and the balance as either a bank or parent company guarantee, meeting strict financial requirements.
Detailed obligations on reporting, auditing, and transparency are strengthened, including state audit rights for project accounts and revenue sharing calculations.
Limits apply to transfers of ownership, changes of control, and access to other public subsidies, both before and after completion.
Project milestones and timelines: The projects must follow detailed progress plans with deadlines for key milestones, notably the investment decision and completion. These milestones are contractually binding and subject to liquidated damages on daily rates.

The different aid scheme, as well as the higher support cap for Utsira Nord than SNII, is due to the fact that, unlike bottom-fixed offshore wind—where markets and established technologies allow for pricing benchmarks in a CfD—floating offshore wind lacks comparable reference projects to establish reliable price estimates. Therefore, it is essential to ensure that the development of a floating wind farm is profitable and that the project is ultimately implemented.

The August 2025 revision of the investment support agreement can be found here (Norwegian only)

As of today, the following support schemes also exist:

Enova, a Norwegian governmental enterprise
Enova is responsible for the promotion of environmentally friendly production and consumption of energy, provides funds for the development of renewable energy but does so on a project-based basis. It is not a rights-based support scheme and a project may only receive financial support if and when it reaches a satisfactory point of maturity. It is not likely that bottom fixed offshore wind installation projects will be eligible for financial support from Enova.

Horizon Europe (successor of Horizon 2020)
Horizon Europe is an EU program which, among other things, allocates funds to renewable projects. Under Horizon 2020 the EU distributed MNOK 290 to a demonstration project outside Karmøy.

Export Financing Norway (EksFIN)
EksFIN has a role in the development of renewable energy in Norway and has financially contributed to several onshore projects.

In the absence of clarification on the financial framework (e.g. depreciation rules, tax rates), it is not possible to predict what the need for support schemes will be. In February 2022, government however, reaffirmed the need for state aid but did not provide any further clarifications regarding financial support schemes.

General overview on foreign investments in Norway

In general, the Norwegian State welcomes foreign investment and there are few restrictions on such investments. Under the terms of Norway’s international commitments, foreign persons have the right to travel, and to enter into commercial- and trade activities in Norway. Specifically, foreign persons are afforded “national treatment” by the Norwegian authorities with regard to such activities. There are no incentive schemes aimed specifically at foreign (or Norwegian) investors.

Although local and foreign investments in Norway normally are to be treated equally, some exceptions apply. These exceptions relate to the fisheries and agricultural sectors, from which foreign investments in general is excluded. No exceptions apply to offshore wind activities.

The most important forms of commercial enterprises in Norway are private or public limited liability companies and general or limited partnerships. A private limited liability company is the business form most widely used by nonresidents of Norway, although some foreign business choose to establish local branches rather than subsidiaries, a decision that is sometimes influenced by the absence of withholding taxes on remittances of branch profits.

The following table provides a general comparison of the features of the various forms of doing business:

	General Partnership	Limited Partnership	Private Limited Liability Company	Public Limited Liability Company
Owner’s liability for company debts	Joint and several, also personal liability	General partner: joint and several, also personal liability. Limited partner: for invested capital	No personal liability. Risk normally limited to capital invested.	No personal liability. Risk normally limited to capital invested.
Capital	No	Minimum NOK 22,223	Minimum NOK 30,000	Minimum NOK 1,000,000
Numbers of owners / members required	At least two individuals or legal entities	At least two individuals or legal entities	Minimum one shareholder (individual or legal entity)	Minimum one shareholder (individual or legal entity)
Authority to act on behalf of the company	The partners	The general partner	Board of Directors and Managing Director	Board of Directors and Managing Director
Auditor compulsory	Only if annual turnover exceeds NOK 5 million or all partners are legal persons where one of their owners have personal liability for the legal person`s liability, and the annual number of persons-years exceeds 10 or the balance sheet exceeds NOK 20 million	Only is annual turnover exceeds NOK 5 million or all partners are legal persons where one of their owners have personal liability for the legal person`s liability, and the annual number of persons-years exceeds 10 or the balance sheet exceeds NOK 20 million	Only is annual turnover exceeds NOK 6 million, or the annual number of person-years exceeds 10 or the balance sheet total exceeds NOK 23 million	Yes
Liability to tax	The partners	The partners	The company	The company