Ørsted has signed a partnership agreement with Brookfield, its institutional partners, and its listed affiliate Brookfield Renewable, for the sale of 12.45% stakes in four of its operational U.K. offshore wind farms, with a combined capacity of approximately 3.5 GW.
Brookfield acquired minority stakes in Hornsea 1, Hornsea 2, Walney Extension, and Burbo Bank Extension offshore wind farms in a $2.25 billion(£1.74 billion) deal.
Ørsted will retain a 37.55 % ownership interest in the four assets and will continue to exercise a similar level of control and governance as before the transaction. It will also continue to oversee the operations and maintenance of the wind farms, according to the current service agreements.
All four assets are fully operational under long-term inflation-linked contracts for difference (CfDs).
The agreement includes a call option, providing Ørsted with the opportunity, but no obligation to, repurchase the assets from Brookfield between two and seven years after the closing of the transaction at a pre-agreed price.
Brookfield is pursuing this transaction through Brookfield Infrastructure Fund V, the world’s largest closed-end infrastructure fund. The transaction is expected to close by the end of 2024, subject to customary regulatory approvals.
With this transaction, Ørsted makes significant progress on the farm-down program announced as part of the February business plan update while ensuring a high level of value retention within the transaction.
For Brookfield, the investment provides the opportunity to partner with Ørsted, the world’s largest and leading offshore wind player, to invest in a scaled, fully operational offshore wind portfolio. This marks another step in Brookfield’s expansion into the offshore wind sector, which is a mature technology with a generation profile complementary to solar PV and onshore wind.
“We’re pleased to welcome Brookfield, a leading renewable energy investor with proven investment and operational expertise, as a partner in four UK offshore wind farms in one of Ørsted’s core strategic markets. Today’s transaction is an important milestone in the farm-down program as part of our business plan, supporting our significant re-investment in new assets,” said Mads Nipper, Group President and CEO of Ørsted.
“This is Brookfield’s first investment in UK offshore wind, which will continue to be a critical part of the energy mix and to support the growing demand we see for clean energy,” added Connor Teskey, CEO of Brookfield Renewable and President of Brookfield Asset Management.