Greencoat UK Wind PLC (LSE:UKW) has agreed to acquire a net 12.5% stake in the Hornsea 1 offshore wind farm for around £400mln.
The renewable infrastructure fund said the acquisition is expected to complete in the third quarter of 2022 and will be funded from cash flow and the company’s revolving credit facility.
Hornsea 1 is the world's largest offshore wind farm and is located 80 miles off the Yorkshire coast in the North Sea. It comprises 174 Siemens 7 megawatt (MW) turbines and has a grid export capacity of 1,200MW. Hornsea 1 entered into full commercial operation in December 2019, has a high load factor and benefits from a 15-year contract for difference (CFD) at a price of £175.25/MWh.
Hornsea 1 is currently 50% owned by Orsted and 50% owned by Global Infrastructure Partners (GIP), with GIP's 50% stake part-funded by £2.9bn of limited recourse debt; Greencoat is buying its stake from GIP so its pro-rata share of the limited recourse debt is £0.7bn, giving a total enterprise value of £1.1bn for Greencoat's net 12.5% stake. Orsted will continue to provide operation, maintenance and management services to the wind farm.
"As the leading independent UK wind farm owner, we are pleased to announce our investment into the world's largest offshore wind farm. Hornsea 1 has a high load factor and high CFD price which complements our subsidy-free investments,” said Shonaid Jemmett-Page, the chair of the company.
"This transaction, once completed, will add another high-quality operating asset to our portfolio and increase our net generating capacity to over 1.6GW.
"We continue to see an attractive pipeline of projects, both onshore and offshore, and given the size and scale that the company has attained over recent years, we remain strongly positioned to deliver more value-accretive acquisitions and extend our track record of strong shareholder returns," she added.