Ørsted has closed a farm-down deal worth around $410m with Energy Capital Partners (ECP) for a 50% stake in its 862MW operational renewable energy portfolio in the US.
The Danish energy company will retain the remaining 50% stake in the portfolio as per the terms of the farm-down deal, which involves three onshore wind farms and a solar power plant in the US.
According to Ørsted, the assets involved in the deal are the 302MW Lincoln Land Wind project in Illinois, the 230MW Plum Creek Wind project in Nebraska, the 103MW Willow Creek Wind project in South Dakota, and the 227MW Muscle Shoals solar farm in Alabama.
Ørsted onshore CEO Neil O’Donovan said: “I’m excited about bringing in such a leading investor as ECP, who has a proven and established track record in power and renewables, for the first farm-down in our Onshore business.
“I consider this transaction another key milestone in the Onshore journey and a testament to the value our projects create. Our ability to raise capital will fuel our continued onshore growth. I’m proud of the team for making this transaction happen.”
The four renewable energy projects are underpinned by power purchase agreements for either their entire capacity or a portion of it.
Ørsted said that it will be the managing member of the partnership with Energy Capital Partners and will continue delivering asset management services to the portfolio.
The deal was financed through Renewable Power Fund Plus, a fund-of-one partnership between Energy Capital Partners and Teachers Insurance and Annuity Association of America (TIAA). It was also funded by debt financing from Mitsubishi UFJ Financial Group (MUFG).
Renewable Power Fund Plus holds 50% of a newly incorporated company holding the four renewable energy projects.
Energy Capital Partners partner Schuyler Coppedge said: “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.
“Ørsted has a first class reputation for owning and operating renewable projects around the world, and we are delighted to partner with them as they continue to grow and diversify their Onshore business.”
