Ørsted has signed a partnership agreement with Brookfield, its institutional partners and its listed affiliate Brookfield Renewable, who will acquire 12.45% minority stakes in four of Ørsted’s operational UK offshore wind farms: Hornsea 1, Hornsea 2, Walney Extension, and Burbo Bank Extension, which have a combined total capacity of approximately 3.5 GW.
The enterprise value of the transaction is $2.3 billion ($570 million net to Brookfield Renewable). Brookfield is pursuing this transaction through Brookfield Infrastructure Fund V, the world’s largest infrastructure fund. The transaction is expected to close by the end of 2024, subject to customary regulatory approvals.
With this transaction, Ørsted makes significant progress on the farm-down program announced as part of the February business plan update while ensuring a high level of value retention within the transaction. For Brookfield, the investment provides the opportunity to partner with Ørsted, the world’s largest and leading offshore wind player, to invest in a scaled, fully operational offshore wind portfolio. This marks another step in Brookfield’s expansion into the offshore wind sector, which is a mature technology with a complementary generation profile to solar PV and onshore wind.
Ørsted 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. Ørsted 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 (CfD).
The agreement includes a call option, providing Ørsted with the opportunity, but no obligation, to repurchase the assets from Brookfield between two and seven years from the closing of the transaction at a pre-agreed price.
