In an agreement with Energy Capital Partners (ECP), Orsted will sell its 50% ownership interest in three onshore wind farms and one solar farm in the US .
The onshore wind farms Lincoln Land Wind, Plum Creek Wind, and Willow Creek as well as the solar farm Muscle Shoals, which are dispersed across four states, make up the 862MW portfolio.
Power purchase agreements are in place for all or a portion of the production capacity for the projects, which are all operating. Orsted will continue to offer asset management services to the projects as the managing member of the partnership.
The transaction is estimated to be worth US$410 million.
A fund-of-one partnership called Renewable Power Fund Plus between ECP and Teachers Insurance and Annuity Association of America (TIAA), a Fortune 100 US insurance and financial services company, and loan financing from Mitsubishi UFJ Financial Group were used to finance the deal (MUFG).
Currently, Renewable Power Fund Plus controls 50% of the brand-new corporation that is in charge of the four projects.
In addition to being Orsted’s first farm-down of onshore assets, this is also the first time the company has sold numerous assets as part of its farm-down programme.
The effective recycling of a sizeable amount of funds will help Orsted achieve its goal of installing 50GW of renewable energy capacity worldwide by 2030. Over 5GW of onshore wind and solar PV projects are now operational or being built by Orsted across the US and Europe.
CEO of Orsted Onshore 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.”
Partner at ECP Schuyler Coppedge says: “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.
“Orsted 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.”