Orsted has signed a partnership agreement with Brookfield, its institutional partners, and its listed affiliate Brookfield Renewable, to acquire minority stakes in Hornsea 1 (pictured), Hornsea 2, Walney Extension, and Burbo Bank Extension offshore wind farms.
Under the £1.75bn deal, Brookfield will hold a 12.45% interest in the projects, which have a combined total capacity of approximately 3.5GW.
Brookfield is carrying out the transaction through Brookfield Infrastructure Fund V, and the deal is expected to close by the end of 2024, subject to customary regulatory approvals.
With this transaction, Orsted makes significant progress on the farm-down programme announced as part of the February business plan update while ensuring a high level of value retention within the transaction, according to the Danish developer.
For Brookfield, the investment provides the opportunity to invest in a scaled, fully operational offshore wind portfolio.
Orsted 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).
Orsted group president and chief executive Mads Nipper said: “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 Orsted’s core strategic markets.
“Today’s transaction is an important milestone in the farm-down programme as part of our business plan, supporting our significant re-investment in new assets.”
Chief executive of Brookfield Renewable and president of Brookfield Asset Management Connor Teskey said: “We are pleased to be partnering with Orsted to invest in four high-quality assets that are critical to supplying the UK with renewable power and supporting the country’s decarbonization objectives.
“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.””
The agreement includes a call option, providing Orsted 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.