Dominion Energy has agreed to sell a 50% stake in the 2600MW Coastal Virginia (CVOW) offshore wind farm to investor Stonepeak for $3bn.
The US developer will retain full operational control of construction and operations of the site, under the deal.
Stonepeak, an alternative investment firm specialising in infrastructure and real assets with more than $61 billion of assets under management, will pay $3bn, around half of the construction costs to date.
Following closing, Dominion Energy and Stonepeak will each contribute 50% of the remaining capital necessary to fund construction of CVOW, provided the total project cost, excluding financing costs, is less than $11.3 billion.
The transaction is to close by the end of 2024. It requires approvals from the SCC and the North Carolina Utilities Commission, as well as certain consents from the Bureau of Ocean Energy Management and other regulatory agencies regarding the assignment of certain contracts and permits needed for the partnership post-closing.
McGuireWoods LLP and Morgan Lewis served as legal advisors. Citi and Goldman Sachs & Co. LLC acted as co-financial advisors for the transaction.
Dominion, which released fourth quarter results today, said the wind farm remains on time and on budget.
Offshore installation is due to start later this year.
The 2.6GW CVOW will be the largest offshore wind farm in the US and will generate enough clean, renewable energy to power up to 660,000 homes once fully constructed in late 2026.
CVOW will consist of 176 turbines and three offshore substations in a nearly 113,000-acre lease area off the coast of Virginia Beach.
Dominion meanwhile released a video (below) featuring senior executive representatives of key suppliers and partners on the project.
In the video, the executives share “their commitment to a successful, on time, and on budget project completion”, said Dominion.
Dominion chief executive Robert M. Blue said a competitive partnership process attracted high-quality interest resulting in a “compelling partner”.
“Stonepeak is one of the world’s largest infrastructure investors with more than $61 billion in assets under management and an extensive track record of investment in large and complex energy infrastructure projects including offshore wind. Their significant financial participation will benefit both our project and our customers,” he said.
“This transaction achieves several key objectives including adding an attractive, well-capitalised, and high-quality partner; establishing robust cost-sharing that provides meaningful protection from any unforeseen project cost increases; and improving our quantitative and qualitative business risk profile through the creation of a highly credit-positive partnership.”
He added: “We have reviewed the transaction with our credit-rating agencies and expect the transaction to be viewed as a significant credit-positive, which will ultimately benefit our customers. A financially healthy Dominion Energy with a strong credit profile and balance sheet is optimally positioned to attract the capital we need to provide an exceptional customer experience and support the Commonwealth of Virginia’s economic and environmental goals.”