Orsted will divest a 50% ownership stake in three onshore wind farms and one solar farm in the US in a deal with Energy Capital Partners (ECP).
The 862MW portfolio comprises the onshore wind farms Lincoln Land Wind, Plum Creek Wind, and Willow Creek Wind as well as the solar farm Muscle Shoals, which are spread across four states.
The projects are all operational and have power purchase agreements in place for all or parts of the production capacity. Orsted will be the managing member of the partnership and will continue to provide asset management services to the projects.
The value of the transaction is approximately US$410 million.
The transaction was funded via a fund-of-one partnership, Renewable Power Fund Plus, between ECP and Teachers Insurance and Annuity Association of America (TIAA), a US Fortune 100 insurance and financial services organisation, along with debt financing from Mitsubishi UFJ Financial Group (MUFG).
Renewable Power Fund Plus now owns 50% of a newly established company holding the four projects.
This is not only Orsted’s first farm-down of onshore assets, but also the first time Orsted is divesting multiple assets in one transaction as part of its farm-down programme.
The transaction successfully recycles a material amount of capital that will support Orsted’s ambition to reach 50GW of installed renewable energy capacity globally by 2030. Orsted currently has a portfolio of over 5GW of onshore wind and solar PV projects in operation and under construction across the US and Europe.
CEO of Orsted Onshore Neil O’Donovan said: “I’m excited about bringing in such a leading investor as ECP, who has a proven and established track record in power and renewables, for the first farm-down in our Onshore business.
“I consider this transaction another key milestone in the Onshore journey and a testament to the value our projects create. Our ability to raise capital will fuel our continued onshore growth. I’m proud of the team for making this transaction happen.”
Partner at ECP Schuyler Coppedge says: “We are pleased to invest in this diverse portfolio of operating wind and solar assets, underpinned by long term investment grade cash flows in attractive markets.
“Orsted has a first-class reputation for owning and operating renewable projects around the world, and we are delighted to partner with them as they continue to grow and diversify their Onshore business.”