Danish energy giant Orsted has entered into an agreement to sell 50% stake in the 1,218MW MW Hornsea 1 offshore wind farm to Global Infrastructure Partners (GIP) for £4.46bn ($5.86bn).

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Image: Hornsea I offshore wind farm has a generating capacity of 1.2GW. Photo: Courtesy of Ørsted.

The total transaction price includes the acquisition cost of 50% stake in Hornsea 1 and commitment to fund 50% of the payments under the engineering, procurement and construction (EPC) contract for the entire wind farm.

Under the agreement, GIP will pay the acquisition amount between 2018 and 2020. The firm plans to partly fund the acquisition through a multi-tranche financing package of over £3.5bn.

Structured and led by Orsted, the financing arrangement is said to be one of the largest single-project financing in the global renewable energy sector. It was co-arranged with GIP.

As part of the agreement, Orsted will be responsible for the construction of the Hornsea 1 offshore wind farm under a full-scope EPC contract. It will also provide long-term operations and maintenance services from its O&M base in Grimsby.

Orsted M&A, partnerships and asset management executive vice president Ole Kjems Sørensen said: “This is our third partnership with GIP, and we are delighted to have one of the world’s largest infrastructure funds as a partner, in what will be the world’s largest offshore wind farm.

“The Hornsea 1 farm down is a landmark transaction which will create substantial value for our shareholders and reduce single asset exposure.”

Subject to certain regulatory approvals, the transaction is anticipated to be completed in the fourth quarter of 2018.

GIP also owns 50% stake in Orsted’s German offshore wind farms, Gode Wind 1 and Borkum Riffgrund 2.

Located in the North Sea 120km from the UK east coast, the Hornsea 1 offshore wind farm will feature 174 wind turbines supplied by Siemens Gamesa.

The wind farm, which is expected to be fully commissioned in 2020, will generate enough electricity to power more than one million UK homes, while offsetting 1.7 million tonnes of CO2 from entering the atmosphere.

Construction on the wind farm was started in January, with the installation of first of 174 monopiles by GeoSea’s installation vessel, Innovation.