Glennmont Partners is investing €1.2bn for a 50% stake in a German offshore wind farm project being developed by Danish energy firm Ørsted.
Ørsted said it has agreed to sell half of the 900MW Borkum Riffgrund 3 wind farm, which is expected to be commissioned in 2025.
Ørsted said the total transaction value of €1.2bn comprises the price for the acquisition of a 50% ownership share and the commitment to fund 50% of the payments under the engineering, procurement and construction contract for the entire wind farm.
The deal is Ørsted’s first farm-down to an institutional investor to be signed prior to taking final investment decision on the project. Ørsted’s final investment decision is expected by end of 2021.
As part of the agreement, Ørsted will construct the wind farm, perform operations and maintenance services for 20 years, and provide a route to market for the power and green certificates generated by Borkum Riffgrund 3.
Martin Neubert, chief commercial officer and deputy CEO at Ørsted, said the firm is delighted to extend its cooperation with Glennmont who are already partners in Gode Wind 1 and are ”focusing their entire portfolio on renewable energy infrastructure investments, thereby supporting the urgently needed shift from fossil-based energy sources to energy systems based on renewable energy sources”.
Francesco Cacciabue, CFO and co-founder at Glennmont Partners said, since Glennmont’s inception over a decade ago the company has sought to establish long-term ”relationships that we can work with on multiple investments for our clients over time, and we’re very happy to once again work with Ørsted to invest in the energy transition”.
“Our clients show a strong interest to invest in clean energy as they seek solid returns whilst decarbonising their portfolio of investments. This interest is underpinned by their confidence in our expertise and ability to deliver value.”
In January, Nuveen, the asset management arm of US financial services group TIAA, acquired Glennmont.
Glennmont said it has structured its investment into Borkum Riffgrund 3 to meet the needs of its institutional investors including Nuveen’s parent, TIAA.
Glennmont will partially finance the acquisition and ongoing funding of its 50% share through a financing package that was structured and led by Ørsted, and co-arranged by Glennmont.
Biff Ourso, the head of infrastructure for Nuveen, said: “The new investment with Ørsted exemplifies how Glennmont achieves its strong clean energy investment track record and is an important part of why Nuveen acquired Glennmont earlier this year.
“Nuveen and TIAA have a strong emphasis on responsible investing, and this latest agreement is a tangible step to demonstrate our commitment to decarbonisation.”
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