Ørsted sell 50% stake in Borkum Riffgrund 3 offshore wind farm to Glennmont

Ørsted has signed an agreement to sell a 50% share in German offshore wind farm 900MW Borkum Riffgrund 3 Borkum Riffgrund 3 (900MW) Offshorenorth-west of Borkum, Germany, Europe Click to see full details to institutional investor Glennmont Partners for a total transaction value of approximately DKK 9 billion (€1.2 billion).

The price comprises the acquisition of a 50% ownership share and the commitment to fund 50% of the EPC contract for the wind farm.

Located in the German North Sea close to Ørsted’s existing 312MW Borkum Riffgrund 1 Borkum Riffgrund 1 (312MW) OffshoreNorth of Borkum, Germany, Europe Click to see full details and 465MW Borkum Riffgrund 2 Borkum Riffgrund 2 (465MW) Offshorewest of Borkum, Germany, Europe Click to see full details offshore wind farms, Borkum Riffgrund 3 will use 81 Siemens Gamesa SG 11.0-200 DD wind turbines. 

Ørsted was awarded the right to build three offshore wind projects, today known as Borkum Riffgrund 3, with bids of €0/MWh in German offshore wind auctions in 2017 and 2018 thanks to cost drivers including next-generation wind turbine technology, high wind speeds, and anticipated power purchase agreements (PPAs) with industrial customers.

As part of the agreement, Ørsted will construct the wind farm under a full-scope EPC contract, perform operations and maintenance services for 20 years, and provide a route to market for the power and green certificates generated by the project. 

Ørsted has designed a 20-year offtake agreement that provides Glennmont with a combination of fixed price and collared prices for 15 years for the majority of the project’s output while leaving certain volumes exposed to market power prices.

Ørsted has so far signed long-term corporate PPAs on for a total of 450MW of output from Borkum Riffgrund 3. The latest PPA was made last month with food retailer Rewe. 

“We’re delighted to extend our cooperation with Glennmont who are already partners in 330MW Gode Wind 1 Gode Wind 1 (330MW) Offshoreoff Juist and Norderney, Germany, Europe Click to see full details and are focusing their entire portfolio on renewable energy infrastructure investments, thereby supporting the urgently needed shift from fossil-based energy sources to energy systems based on renewable energy sources,” said Martin Neubert, chief commercial officer and deputy group chief executive at Ørsted.

Glennmont will partially finance the transaction through a package that was structured and led by Ørsted. The long-term senior debt facilities will be provided by eight banks: Santander, SEB, Natwest, ING, Bank of China, Helaba, ABN AMRO and Siemens Bank.

Borkum Riffgrund 3 is expected to be commissioned in 2025, subject to Ørsted’s final investment decision, which is due by the end of the year, subject to project permit and merger and foreign investment clearances

The transaction is Ørsted’s first divestment to be signed prior to a final investment decision on the project.

Glennmont, which is wholly owned by global asset manager Nuveen, is one of Europe’s largest fund managers investing exclusively in clean energy infrastructure.