Renewable energy firm Ørsted – the Danish company formerly known as DONG Energy – has agreed to sell half its stake in the 659MW Walney offshore wind project currently under construction off the coast of Cumbria.
The company announced yesterday it has signed a deal that will see it divest 50 per cent of its shares in the project for £2bn to a consortium consisting of leading Danish pension funds PKA and PFA, with each obtaining an equal 25 per cent ownership.
The £2bn sale price also includes a commitment from the two pension funds to pay for 50 per cent of the engineering, procurement and construction (EPC) contract for the project, set to be paid during 2017 and 2018.
Ørsted will maintain a 50 per cent stake, as well as looking after construction and long term operation and maintenance of the project. It said the deal is set for completion by the end of this year, subject to regulatory approval.
Once completed the Walney Extension project is expected to be the largest offshore wind farm in the world, consisting of 87 turbines and generating enough power to meet the needs of more than 500,000 UK homes.
Henrik Poulsen, Ørsted CEO, said the divestment was in line with the company’s expectations of “value creation” in the project, and that he was “delighted” to welcome PKA and PFA as new co-owners.
“We already have a strong partnership with PKA on three other offshore wind farms and we look forward to building an equally long-lasting relationship with PFA on what will be the world’s biggest wind farm when completed,” he said. “Both partners are committed to the green energy transition and I’m pleased that our offshore wind assets continue to be attractive to institutional investors.”
Meanwhile Allan Polack, PFA Group CEO, said the investment marked “yet another step” for the Danish pension fund into the renewable energy market. “The investment fits perfectly into our strategic work with focus on alternative investments that contribute to providing our customers with reliable and stable long-term returns,” he said.
The sale was part-financed via a new long-term debt facility provided by Macquarie, marking the Australian bank’s first offshore wind transaction since it acquired the previously UK state-owned Green Investment Bank – now renamed the Green Investment Group (GIG) – earlier this year.
James Wilson, co-head of Macquarie Infrastructure Debt Investment Solutions (MIDIS), said it had been working closely with Ørsted over the past 15 months on the deal. “The transaction demonstrates Macquarie’s ability to apply our considerable expertise and resources to deliver large amounts of capital, with execution certainty, to support the most complex transactions,” he said.