Total SA struck a deal on June 3 to enter Scotland’s largest offshore wind farm project, which according to CEO Patrick Pouyanné provides a major boost to its low-carbon strategy.
The French energy giant will acquire a 51% stake in the Seagreen 1 offshore wind farm project, located off the coast of Scotland in the U.K. North Sea. Total agreed to make an upfront payment to SSE Renewables at closing of 70 million pounds (US$88 million) for the acquisition. The agreement also includes earn-outs of up to 60 million pounds in aggregate, subject to performance conditions.
Total said the Seagreen 1 project represents a global investment of around $3.7 billion. The company has secured close to 70% of external financing for its 51% stake, according to its release.
“Total builds up a strong position in the world’s largest offshore wind market, as it becomes a majority stakeholder in the Seagreen 1 project, one of the largest offshore wind farms in the U.K. North Sea,” Pouyanné said in a statement on June 3. “This move represents a major change of scale for Total’s offshore wind activity in line with our strategy of profitable growth in renewables and low carbon electricity.”
Seagreen 1 has secured all necessary major permits and onshore construction began in first-quarter 2020. Designed to cover the energy needs of around 1 million homes, the 1,140 megawatts (MW) project will start producing renewable electricity at year-end 2022. Once completed, it will be Scotland’s largest offshore wind farm.
The purchase agreement between Total and SSE also covers a potential extension opportunity of up to 360 MW.
Total is targeting 25 gigawatts of a renewable generation capacity in 2025 as part of its strategy to build a portfolio of activities in low-carbon electricity.
The Seagreen 1 transaction remains subject to conditions precedent, including public authorities approval and should be finalized by July, the company said.
SSE Renewables was advised by Jefferies International Ltd. and Linklaters LLP on the transaction.
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