Just days after Ørsted’s announcement, Ørsted itself said it would sell a 49% equity stake in its Hornsea 3 offshore wind farm. The buyers are affiliates of a fund managed by Apollo Global Management. This strategic partnership is worth about DKr39 billion, or $6.5 billion. Though small, it signifies an important move in Ørsted’s longterm plan to expand its renewable energy holdings. Hornsea 3 development—the world’s largest single offshore wind farm—located 160 kilometers off the Yorkshire coast with a capacity of 2.9 gigawatts (GW). It’s poised to strongly exceed providing power for more than three million UK homes.
The agreed upon transaction awaits typical regulatory approvals with an expected close before the end of 2025. Through the deal Apollo will become majority owner of Hornsea 3. In addition, they’ll pay all of the outstanding construction costs, propelling the project in its final successful stretch before completion. This partnership comes as Ørsted begins to put a greater focus on getting the most out of its offshore wind investments. The announcement comes after the company scrapped its Hornsea 4 offshore wind farm earlier this year, citing surging supply chain costs and construction risks.
Details of the Transaction
Hornsea 3 is under construction in Ørsted’s Hornsea zone, next to the two operational projects Hornsea 1 and 2. Once up and running, Hornsea 3 will bring total installed capacity of the Hornsea zone to more than 5 GW. This expansion is part of Ørsted’s broader strategy to lead in offshore wind energy and contribute significantly to the UK’s renewable energy goals.
In this partnership, Linklaters offered corporate legal advice to financial sponsors Apollo Funds. At the same time, RBC Capital Markets acted as financial advisor. Paul, Weiss, Rifkind, Wharton & Garrison acted for the lenders participating in the transaction. The co-investors, La Caisse and PSP Investments, have agreed to provide equity and debt capital to support the project.
Impact on Renewable Energy Goals
Completion of Hornsea 3 would be a major shot in the arm for the UK’s fledgling renewable energy sector. The infrastructure project will create enough renewable energy to power more than three million homes across the UK. This accomplishment furthers our country’s goals to increase the production of sustainable and renewable energy sources.
Trond Westlie, a spokesperson for Ørsted Apollo, said he was hopeful about this new partnership with Apollo.
“We’re pleased to welcome Apollo as a partner for Hornsea 3, as they bring infrastructure expertise and scaled capital. We look forward to working with them to deliver this important project that will produce enough electricity to power more than three million UK homes once completed and contribute to the renewable transformation of the UK. The divestment represents an important milestone for Ørsted as we continue to deliver on our partnership and divestment programme, which is a cornerstone of our business plan.” – Trond Westlie
A Step Forward for Ørsted
As global demand for renewable energy rises, Ørsted’s strategic decisions reflect its commitment to leading the transition towards sustainable energy solutions. Their new partnership with Apollo provides the key investment to do that. It brings the experience required to steer through the complexities of large-scale offshore wind projects.
Adam Petrie highlighted Ørsted’s role in this sector by stating,
“Ørsted is a global leader in offshore wind power and Hornsea 3 is its most significant project yet, with capacity to bring reliable, renewable energy to millions of homes across the UK.” – Adam Petrie