Ørsted has signed an agreement to sell 50% of its 1.2GW Hornsea Project One offshore wind farm to Global Infrastructure Partners (GIP).
As part of the agreement, Ørsted will construct the wind farm under a full-scope EPC contract and will provide long-term O&M services from its base in Grimsby, as well as provide a route to market for the power generated by the wind farm.
The total sales price includes the price for the acquisition of a 50% ownership share and the commitment to fund 50% of the payments under the EPC contract for the entire project, including the transmission assets. It amounts to approximately GBP 4.46 billion, which is to be paid until 2020.
The transaction is subject to certain regulatory approvals and is expected to close by the end of the year.
GIP will partially finance the acquisition using a multi-tranche financing package of more than GBP 3.5 billion, containing a mixture of investment grade-rated project bonds issued to a consortium of blue-chip institutional debt investors with UK presence, commercial bank loans and mezzanine debt provided by the Danish pension fund PFA, with some tranches guaranteed by EKF, Denmark’s Export Credit Agency.
“This is our third partnership with GIP, and we are delighted to have one of the world’s largest infrastructure funds as a partner, in what will be the world’s largest offshore wind farm. The Hornsea 1 farm down is a landmark transaction which will create substantial value for our shareholders and reduce single asset exposure,” said Ole Kjems Sørensen , Executive Vice President for M&A, Partnerships and Asset Management at Ørsted.
The financing, said to be the largest single-project financing to date in the global renewables sector, was structured and led by Ørsted and co-arranged with GIP.
GIP also holds 50% ownership shares of Ørsted’s Gode Wind 1 and Borkum Riffgrund 2 offshore wind farms in Germany.
The Hornsea Project One is currently under construction some 120km off the Yorkshire coast in the UK. The wind farm’s 174 7MW Siemens wind turbines are slated to be fully operational in 2020.