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Ørsted has agreed to sell half of the world’s largest offshore wind farm to Apollo in a $6.5bn deal, marking a big step forward for the renewable energy developer as it battles rising costs and political challenges.
Denmark-listed Ørsted on Monday said the US private capital group would take a 50 per cent equity stake in the Hornsea 3 offshore wind farm off the east coast of England and fund half of the project’s remaining construction costs.
The 2.9 gigawatt project, located 160km off the Yorkshire coast, is due to be finished around the end of 2027, and is one of eight major offshore wind projects Ørsted is building around the world.
Ørsted’s business model is to sell stakes in projects to fund the next ones, but selling a share in Hornsea 3 has been particularly important to the company given its recent funding challenges.
Trond Westlie, chief financial officer at Ørsted, said Apollo would bring “infrastructure expertise and scaled capital”, adding the sale was an “important milestone” for the company.
The announcement confirms an earlier report in the Financial Times.
It is the latest in a series of European energy infrastructure deals struck by Apollo, which is investing with RWE in Germany’s electricity grid and led a $4.5bn financing for the Hinkley Point C nuclear power plant being developed by French energy group EDF in the UK.
Leslie Mapondera, partner at Apollo and head of European credit, said Apollo aimed to serve as a “provider of long-term and flexible capital solutions”.
Apollo has struck a record $17bn in energy infrastructure deals in Europe this year.
Ørsted, 50 per cent owned by the Danish state, is the world’s largest offshore wind developer but has faced a difficult few years as the political and economic backdrop to the industry shifted.
The company walked away from two major projects in the US in August 2023 as rising interest rates pushed up project costs, while more recently it has been under pressure because of US President Donald Trump’s hostility to offshore wind.
Ørsted raised $9bn from investors in a rights issue last month after Trump’s attempts to block a rival developer’s project spooked investors. The presidential intervention thwarted Ørsted’s efforts to sell a stake in its Sunrise Wind project off the coast of New York.
The Trump administration then issued a stop-work order against Ørsted’s Revolution Wind project also off the US north-east coast, although Ørsted has persuaded a judge to lift the order.
Selling a stake in Hornsea 3 was a key part of a divestment programme aimed at helping to raise enough funds to continue building the rest of its projects.
Hornsea 3 is an important part of the British government’s plans to decarbonise its electricity system by 2030. The planned 2.9GW capacity will be potentially able to generate enough power across the year to supply the equivalent of about 3mn homes.