Orsted agrees to divest 12.45% of a third of its UK assets to Canadian investor
Investment giant Brookfield has agreed a £1.75bn deal to acquire shares in four of Orsted’s operational UK offshore wind farms.
Brookfield, alongside its listed affiliate Brookfield Renewable Partners, will acquire 12.45% minority stakes in Orsted’s Hornsea 1, Hornsea 2, Walney Extension, and Burbo Bank Extension schemes by the end of 2024.
Brookfield Renewable Partners is owned and operated by Brookfield Asset Management and focuses on expanding its sustainable energy portfolio, including investments in Westinghouse, which was recently announced as a finalist in Great British Nuclear’s small modular reactor (SMR) design competition.
The transaction is being bankrolled by the Canadian asset manager’s Infrastructure Fund V, which is the world’s largest closed-end infrastructure fund, under long-term contracts for difference (CfDs).
CfDs are the government’s main way to incentivise low-carbon investment through facilitating private contracts between low carbon electricity generators and the government-owned Low Carbon Contracts Company (LCCC).
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Although Orsted, which is the largest offshore wind firm globally, will retain 37.55% ownership in the four assets, it will be allowed to repurchase the shares from Brookfield at a pre-agreed price between two and seven years after closing the deal.
The Danish company operates more than 5GW of offshore wind capacity across its 12 UK farms, with the assets it will soon share with Brookfield responsible for a combined total of 3.5GW. An additional 5GW are on the way, with the Hornsea 3 and Hornsea 4 projects under construction.
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