Orsted is divesting a 50% equity stake in three US onshore projects with a combined capacity of 1318MW to Energy Capital Partners (ECP).
The farm-downs include two solar farms in Texas, Mockingbird Solar (468MW) and Sparta Solar (250MW), and Eleven Mile Solar Center, a 300MW solar and 300MW/1,200 MWh battery storage project in Arizona.
With operations commencing in 2024, all three projects have tax equity partnerships and power purchase agreements in place.
The value of this transaction is US$572m, representing continued execution on Orsted’s divestment programme and generating proceeds to support our progress towards its mid- and long-term targets.
Orsted will retain a 50% equity ownership interest in the three projects and will continue to operate the projects over their lifespan.
As the financial closing of the transaction is across different project companies, the total impact from the transaction will be recognised across the reporting periods Q4 2024 and Q1 2025 subject to certain conditions precedent.
This year, Orsted raised approximately US$734m in upfront proceeds for these projects from tax equity partner J.P. Morgan and subsequently signed its first long-term tax credit transfer agreement for Mockingbird Solar Center.
The sales price relating to the divestment and tax equity funding brings the total proceeds raised for the three projects to US$1,306m.
James Giamarino, head of commercial in region Americas at Orsted, said: “These transactions reflect our close engagement with a range of commercial partners, including our tax equity and transferability partners, which are all key to the growth of Orsted’s US onshore portfolio.
“As we make further progress on our growth ambitions, we’ll use this recycled capital to continue the build-out of projects that create long-term value for our partners.”
The farm-down of the three projects builds on Orsted’s existing partnership with ECP, which purchased a 50% equity stake in three wind farms and one solar farm in 2022 as part of Orsted’s first-ever farm-down in the US onshore market.
Matt Himler, principal at ECP, added: “These projects are prime examples of the kind of large-scale clean energy infrastructure the US needs to meet the growing demand for electricity.
“We’re pleased to expand our partnership with Orsted and to invest in their diversified portfolio of contracted solar and battery storage assets in high load growth markets.
“We look forward to leveraging our extensive sector expertise and track record in renewables to deliver carbon-free energy to Arizona and Texas.”
With Mockingbird, Eleven Mile, and Sparta Solar officially online, Orsted now has a portfolio of over 6GW of onshore wind, solar, and battery storage projects in operation or under construction across the US.