DONG Energy has signed an agreement to sell half of its 50% share in the 630 MW London Array 1 offshore wind farm to La Caisse de depot et placement du Quebec, a Canadian institutional fund manager, for approximately $1 billion.
Located about 20 km off the coasts of Kent and Essex, U.K., London Array 1 is the world's largest offshore wind farm and includes 175 Siemens turbines. At completion of the transaction, La Caisse will enter the existing joint venture with a 25% ownership share alongside DONG Energy (25%), E.ON (30%) and Masdar (20%). DONG Energy will remain the O&M services provider to London Array.
"Farm down of our ownership shares in wind projects is a central part of our business model and our strategy is to continuously enter into partnership agreements with industrial and financial partners to extract part of the value creation from our projects, share the risk in our portfolio and attract capital to be able to continue to invest in new offshore wind farms," explains Samuel Leupold, executive vice president of DONG Energy Wind Power. "We look forward to continuing the collaboration with the partners behind the consortium of London Array, now including La Caisse."
Macky Tall, senior vice president of infrastructure at La Caisse, adds, "This is an opportunity for us to invest, alongside established partners, in a quality asset in a growth-driven sector. We are investing in this project with a long-term horizon and expect to generate attractive returns for many years ahead. "
DONG Energy and La Caisse have also agreed a long-term transfer agreement for the power production and green certificates arising from La Caisse's share of London Array 1.
The transaction is subject to a number of customary conditions for a transaction of this nature, including transfer of project rights and operational performance of the wind park and approval by relevant authorities. The transaction is expected to be completed in the first half of this year.