Farm-Down Program: Ørsted Sells Shares in Four Uk Offshore Wind Farms To Brookfield
Fredericia, Denmark - Ørsted announced in February that it will accelerate divestments in the form of farm-downs and divestments with the aim of generating proceeds in the order of DKK 115 billion (approx. EUR 15.4 billion) by 2030.
The transaction is valued at GBP 1.745 billion (approx. EUR 2.1 billion). Brookfield is executing this transaction through Brookfield Infrastructure Fund V, the world's largest closed-end infrastructure fund. The transaction is expected to be completed by the end of 2024, subject to customary regulatory approvals.
Ørsted sees significant progress on its farm-down program as a result of the transaction. For Brookfield, the investment provides the opportunity to partner with the world's largest and leading offshore wind energy provider and invest in a scaled, fully operational offshore wind portfolio.
Ørsted will retain a 37.55 percent stake in the four offshore farms and will continue to exercise a similar level of control and governance as before the transaction. Ørsted will continue to oversee the operation and maintenance of the wind farms in accordance with the applicable service agreements. All four assets are fully operational under long-term, inflation-linked contracts for difference (CfDs).
“We are pleased to be partnering with Ørsted to invest in four high-quality assets that are critical to supplying the UK with renewable power and supporting the country’s decarbonization objectives. This is Brookfield’s first investment in UK offshore wind, which will continue to be a critical part of the energy mix and to support the growing demand we see for clean energy“, said Mads Nipper, Group President and CEO of Ørsted, welcoming the deal.
The agreement includes a call option that gives Ørsted the option, but not the obligation, to repurchase Brookfield's assets between two and seven years after completion of the transaction at a pre-agreed price.
The Ørsted share is down this morning and currently stands at 55.74 euros. Compared to the price at the turn of the year, this is an increase of around 11 percent.
Source: IWR Online, 30 Oct 2024