Ørsted partnered with Energy Capital Partners (ECP) for the Danish energy company’s first-ever farm-down of onshore assets.
In an Oct. 21 release, Ørsted said it had closed a transaction with ECP, a private equity firm based in New Jersey, to divest a 50 % ownership stake in a portfolio consisting of three onshore wind farms and one solar farm in the U.S.
The transaction, valued at roughly $410 million, is expected to support Ørsted’s ambition to reach 50 gigawatts (GW) of installed renewable energy capacity globally by 2030.
“I consider this transaction another key milestone in the onshore journey and a testament to the value our projects create,” Neil O’Donovan, CEO of Ørsted Onshore, commented in the company release.
The company release added that the ECP transaction is not only Ørsted’s first farm-down of onshore assets, but also the first time Ørsted is divesting multiple assets in one transaction as part of its farm-down program.
“Our ability to raise capital will fuel our continued onshore growth. I’m proud of the team for making this transaction happen,” O’Donovan added.
Ørsted currently has a portfolio of over 5 GW of onshore wind and solar PV projects in operation and under construction across the U.S. and Europe.
The portfolio included in the ECP transaction comprises the onshore wind farms Lincoln Land Wind, Plum Creek Wind and Willow Creek Wind plus the solar farm Muscle Shoals located in Illinois, Nebraska, South Dakota and Alabama.
The projects are all operational and have power purchase agreements in place for all or parts of the production capacity. Combined capacity of the portfolio currently stands at 862 megawatts (MW).
Ørsted will be the managing member of the partnership and will continue to provide asset management services to the projects.
“We are pleased to invest in this diverse portfolio of operating wind and solar assets, underpinned by long-term investment grade cash flows in attractive markets,” Schuyler Coppedge, partner at ECP, commented in the Ørsted release.
Spread across four states, the portfolio includes exposure to three markets: MISO, SPP North and TVA.
“Ørsted has a first-class reputation for owning and operating renewable projects around the world,” Coppedge continued, “and we are delighted to partner with them as they continue to grow and diversify their onshore business.”
The transaction was funded via a fund-of-one partnership, Renewable Power Fund Plus, between ECP and Teachers Insurance and Annuity Association of America (TIAA), a U.S. Fortune 100 insurance and financial services organization, along with debt financing from Mitsubishi UFJ Financial Group (MUFG)
Renewable Power Fund Plus now owns 50% of a newly established company holding the four Ørsted projects. TIAA also owns global asset manager Nuveen and its subsidiary Glennmont Partners, who acquired 50% of Ørsted’s German offshore wind farm Borkum Riffgrund 3 in 2022.
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