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Ørsted goes 50:50 on Hornsea One

By: Tom Russell 19/09/2018 Ørsted

General Windfarms

Ørsted has signed an agreement to sell 50% of the 1.2GW Hornsea Project One offshore wind farm to Global Infrastructure Partners (GIP). Currently under construction, the wind farm is poised to be the world’s largest offshore wind farm when commissioned in 2020.

Turbine foundation installation is underway at the site and is being completed using DP2 Innovation. The monopiles will support 174 SWT-7.0-154 turbines which when commissioned in 2020 will power more than 1 million homes.

As part of the agreement, Ørsted will construct the wind farm under a full-scope EPC contract. Ørsted will also provide long-term operations and maintenance services from its operations and maintenance base in Grimsby and provide a route to market for the power generated by the wind farm.

Ole Kjems Sørensen, Executive Vice President for M&A, Partnerships and Asset Management at Ørsted, says: “This is our third partnership with GIP, and we are delighted to have one of the world’s largest infrastructure funds as a partner, in what will be the world’s largest offshore wind farm. The Hornsea 1 farm down is a landmark transaction which will create substantial value for our shareholders and reduce single asset exposure.”

The total sales price for Hornsea Project One comprises the price for the acquisition of a 50% ownership share and the commitment to fund 50% of the payments under the EPC contract for the entire wind farm (including the transmission assets). It amounts to approximately GBP 4.46 billion, which is to be paid between 2018 and 2020. The transaction is subject to certain regulatory approvals, including from relevant competition authorities, and is expected to close in Q4 2018.

GIP will partially finance its acquisition using a multi-tranche financing package of more than GBP 3.5 billion, containing a mixture of investment grade-rated project bonds issued to a consortium of blue chip institutional debt investors, commercial bank loans and mezzanine debt provided by the Danish pension fund PFA, with some tranches guaranteed by EKF, Denmark’s Export Credit Agency.

The financing, which will be the largest single-project financing to date in the global renewable energy sector, was structured and led by Ørsted, and co-arranged with GIP.

GIP also holds 50% ownership shares of two of Ørsted’s German offshore wind farms, Gode Wind 1 and Borkum Riffgrund 2.

For more information on wind farm financing and construction, click here.

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Ørsted goes 50:50 on Hornsea One

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