Ørsted divests share of four US onshore wind farms to Stonepeak
(Image credit: 123rf.com)
Ørsted has signed a transaction with alternative investment firm Stonepeak, whereby Ørsted will divest an equity ownership stake in a portfolio of four US onshore wind farms with a total capacity of 957MW.
The value of the transaction is approximately $300 million. In addition, Ørsted has previously raised approximately $700 million in tax equity proceeds for this portfolio, bringing the total proceeds raised to approximately $1 billion.
Stonepeak will receive 80% of the cash distributions associated with the projects, while Ørsted will continue to operate the portfolio of assets.
As part of the transaction, Ørsted retains a unilateral call option for Stonepeak’s interests that can be exercised under certain circumstances after the closing of the transaction.
While structured differently, the transaction broadly corresponds to Ørsted’s historical farm-down approach, in which ownership shares of existing operating assets are divested in order to recycle and redeploy capital for future value-creating projects.
The unique partnership structure, states Ørsted, allows them to maximize capital redeployment while also retaining operational decision-making and long-term optionality around the portfolio.
David Hardy, executive vice president and CEO of Region Americas at Ørsted said, “This deal signifies the value that our US onshore renewable energy projects can deliver to our investors while also demonstrating the holistic and flexible approach we take to partnerships and divestments. While Ørsted will continue to operate each asset over its lifetime, we’ll use this capital to fund projects that continue to create the most value for our stakeholders and fuel our growth in the renewable energy sector.”
Anthony Borreca, senior managing director at Stonepeak added, “The need for efficient infrastructure with the power to further the energy transition continues to grow, and onshore wind continues to play a major role in helping to meet that demand.
“Ørsted’s US onshore assets are young and have been built with trusted technology, which gives us confidence in their potential to make a meaningful and positive long-term impact on the communities they serve. We look forward to partnering closely with Ørsted on this highly contracted, geographically diverse portfolio.”
