Ørsted sheds to GIP 50% of Hornsea 1 offshore wind project

Hornsea Project Two. Source: ABB (new.abb.com)

September 19 (Renewables Now) - Danish energy company Ørsted A/S (CPH:ORSTED) said on Tuesday it has agreed to offload a 50% stake in its under-construction 1,218-MW Hornsea 1 offshore wind farm in the North Sea to Global Infrastructure Partners (GIP).

Ørsted will take care of building the wind park under a full-scope engineering, procurement and construction (EPC) agreement and will deliver long-term operations and maintenance (O&M) services following completion. Additionally, it said it will “provide a route to market” for the huge wind park’s output.

Hornsea One, being built 120 km (75 miles) off the Yorkshire coast, is expected to become fully operational in 2020. Upon completion, the plants' 174 Siemens Gamesa turbines of 7 MW each will make up the world’s largest offshore wind park. It will then leapfrog the 659-MW Walney Extension offshore wind farm in the Irish Sea, which Ørsted officially opened earlier in September.

The value of the acquisition stands at GBP 4.46 billion (USD 5.87bn/EUR 5.02bn), including the price for buying the 50% stake and a commitment for GIP to finance 50% of the expenses under the EPC contract. The amount will be distributed between 2018 and 2020. According to the statement, GIP will fund the purchase through an over GBP-3.5-billion debt package, including grade-rated project bonds, bank loans and mezzanine debt from the Danish pension fund PFA. The financing was structured and led by Ørsted and co-arranged with GIP.

This is the third offshore wind partnership between Ørsted and GIP. The latter owns 50% stakes in the Danish firm’s 330-MW Gode Wind 1 and 450-MW Borkum Riffgrund 2 projects in German waters. The deal is pending regulatory approvals and is expected to close in the last quarter of 2018.

Ørsted noted that the transaction will not affect its full-year outlook, thus confirming expectations that its earnings before interest, tax, depreciation and amortisation (EBITDA) forecast, excluding new partnerships, will move towards the upper end of the previously announced guidance range of between DKK 12.5 billion (USD 1.96bn/EUR 1.7bn) and DKK 13.5 billion and gross investments will range at DKK 16 billion-18 billion. About 85% of the total profit from the Hornsea 1 deal will be recorded this year, Ørsted said.

(GBP 1.0 = USD 1.315/EUR 1.126)

(DKK 1.0 = USD 0.157/EUR 0.134)

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Veselina Petrova is one of Renewables Now's most experienced green energy writers. For several years she has been keeping track of game-changing events both large and small projects and across the globe.

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