Ørsted has completed the divestment of 12.45% minority stakes in four operating UK offshore wind farms to Brookfield.
Hornsea 1, Hornsea 2, Walney Extension, and Burbo Bank Extension have a combined total capacity of 3.5 GW. The enterprise value of the transaction, first announced in October, is $2.3 billion ($570 million net to Brookfield Renewable).
The transaction is part of Ørsted’s ‘ farm-down’ programme, announced in its February business plan update. Brookfield said it marks another step into its expansion into the offshore wind sector, which it described as “a mature technology with a complementary generation profile to solar PV and onshore wind”.
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. Ørsted 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 (CfD).
In the October announcement, Connor Teskey, CEO of Brookfield Renewable and President of Brookfield Asset Management, said: “We are pleased to be partnering with Ørsted to invest in four high-quality assets that are critical to supplying the UK with renewable power and supporting the country’s decarbonisation objectives. This is Brookfield’s first investment in U.K. 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.”
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 from the closing of the transaction at a pre-agreed price.