Brookfield has signed an agreement to acquire a 12.5% minority stake in four UK offshore wind farms, belonging to Danish energy company and developer Ørsted.
The Canadian investment manager will have minority stakes in the operational Hornsea 1, Hornsea 2, Walney Extension, and Burbo Bank Extension projects, which have a combined total capacity of approximately 3.5GW. All of the assets operate under long-term Contracts for Difference (CfDs).
Ørsted will retain a 37.55% ownership interest in the four assets and will continue to exercise a similar level of control and governance as before the transaction. It will also oversee maintenance and operations of the wind power plants, according to current service agreements.
The transaction value is £1.7 billion, pursued through Brookfield Infrastructure Fund V, which is the world’s largest closed-end infrastructure fund. The agreement includes a call option, which means Ørsted will be able to repurchase the assets between two and seven years after the close of the transaction.
It marks significant progress on Ørsted’s farm-down programme, announced as part of its February business plan update, and is another step in Brookfield’s expansion into the offshore wind sector.
Mads Nipper, CEO of Ørsted, called the transaction an “important milestone” and will support the company’s “significant re-investment” in new assets. In February, the firm announced it would reduce its installed capacity ambition to 35-38GW by 2030, providing roughly £3.84 billion capital expenditure relief in 2024-2026.
Connor Teskey, CEO of Brookfield Renewable and president of Brookfield Asset Management, said: “This is Brookfield’s first investment in UK offshore wind, which will continue to be a critical part of the energy mix and to support the growing demand we see for clean energy.”
In November 2023, UK utility Octopus Energy’s generation arm acquired a 12.5% stake in the Walney Extension offshore wind development, which has been operational since 2018. Brookfield has a 20% stake in the utility, taken on as part of its acquisition of Australian Origin Energy.
Ørsted currently operates more than 5GW of offshore wind capacity and has an additional 5GW under construction or in development in the UK, including the Hornsea 3 and Hornsea 4 projects. In this year’s CfD auction round, Hornsea 3 re-bid and was awarded 1,080MW and Hornsea 4 bid in for the first time, receiving a 2,400MW CfD.
The Department for Energy Security and Net Zero (DESNZ) called the developments, situated off the Yorkshire coast, “Europe’s largest and second largest” wind farms. Ørsted claims that Hornsea 3, with a 2,400MW capacity, is the largest globally.
