In a deal worth 1.745 billion British pounds (approximately 15.7 billion DKK), investment company Brookfield Asset Management is buying into four of Ørsted's operational British offshore wind farms. The deal is being made through Brookfield's fund Brookfield Infrastructure Fund V, Ørsted said in a press release.
The deal includes a minority stake of 12.45 percent ownership of the offshore wind farms Hornsea 1, Hornsea 2, Walney Extension and Burbo Bank Extension, which have a combined capacity of approximately 3.5 GW.
The divestment is a milestone for Ørsted in the new strategy, which was launched in February to create a more profitable business following several large write-downs. In this strategy, partial divestments were an important factor. The strategic plan thus required, among other things, that Ørsted would divest ownership interests in existing projects equivalent to somewhere between DKK 70 and 80 billion by 2026.
Ørsted will retain an ownership interest of 37.55 percent of the four offshore wind farms and maintain the same degree of control as before the transaction. Ørsted will also continue to be responsible for the operation and maintenance of the offshore wind farms in accordance with the current service agreements. All four offshore wind farms are fully operational and have long-term inflation-indexed contracts for difference.
- We are pleased to welcome Brookfield, a leading investor in renewable energy with expertise in investments and operations, as a partner in four of our offshore wind farms in the UK, one of Ørsted's most important markets. Today's transaction is an important milestone in our partial divestment program, which is part of our business plan, and supports the significant reinvestment we are making in new projects, says Mads Nipper, Group President and CEO of Ørsted.
Buyback option
For Brookfield, the investment is a step forward in its expansion into the offshore wind market, which is a mature technology with a production profile that complements solar and onshore wind.
- We are pleased to be working with Ørsted to invest in four offshore wind farms that are crucial to the UK's renewable energy supply and support the country's carbon reduction goals. This agreement is Brookfield’s first investment in the UK offshore wind industry, which will continue to be an important part of the energy mix and support the growing demand for renewable energy,” said Connor Teskey, CEO of Brookfield Renewable and Group CEO of Brookfield Asset Management.
The transaction is expected to close before the end of 2024, subject to customary regulatory approvals. The agreement includes a call option that allows Ørsted to repurchase the assets from Brookfield at an agreed price within two to seven years of closing.
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