German energy major RWE AG (ETR:RWE) will become the sole owner of the 1,560-MW Nordseecluster offshore wind project portfolio in the North Sea by acquiring the minority share of its partner, Canadian power producer Northland Power Inc (TSE:NPI).
The two companies announced on Thursday that RWE Offshore Wind GmbH will pay EUR 35 million (USD 37.5m) in cash to acquire Northland’s entire 49% stake in the four-site portfolio, including assets, liabilities and all committed contractual obligations of the seller in relation to the projects. The Canadian company noted that the agreed purchase price represents a premium to the costs incurred by it to date.
RWE plans to build the cluster to the north of the island of Juist in two phases – Nordseecluster A of 660 MW and Nordseecluster B of 900 MW. The two projects that are part of the first phase are currently in the permit application phase and are expected to enter construction offshore in 2025 in order to be completed in early 2027. The other two projects should be completed in 2029. In all, the four plants will be made up of 104 Vestas turbines of 15 MW each.
The Nordseecluster will be executed in close proximity to the existing 332-MW Nordsee One wind farm, which RWE will continue to operate jointly with its Canadian partner. The German group envisages substantial economies of scale and synergies.
Northland’s president and CEO Mike Crawley said that the company continues to consider offshore wind to be “a focal point” of its strategy but following an evaluation of the particular portfolio in the current environment, it has determined that project costs will be higher than expected and will only partially be offset by higher estimated revenue off-take.
“As a result, the project no longer meets Northland’s investment criteria,” Crawley stated. The divestment is not seen to impact Northland’s growth trajectory, the company mentioned.
Following the stake sale, Northland will continue to own a 60% stake in the 600-MW Gemini offshore wind farm in the Netherlands along with 85% in the 332-MW Nordsee One and 100% of the 252-MW Deutsche Bucht wind parks off the German coast. In the meantime, it is developing projects in Poland, Scotland and Taiwan.
(EUR 1.0 = USD 1.072)
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