Danish pension funds invest £2bn in world’s biggest offshore wind farm

Danish pension funds PFA and PKA and a consortium of institutional investors are investing £2bn (€2.3bn) in the Walney Extension offshore wind farm project in the UK.

PFA and PKA are each buying a 25% stake from Danish energy firm Ørsted (formerly DONG Energy) in the renewable energy facility, which once completed will be the biggest of its kind, PFA said.

PFA is making a direct investment of around £330m – its largest single investment ever made – and PKA said it was also making a similarly sized direct investment.

The acquisition is also being financed through an investment-grade bond issued by PFA and PKA to a consortium of institutional investors, many of which manage UK pension and insurance fund capital, Ørsted said.

The investors include Aviva Investors, BlackRock Investment Management, Legal & General Investment Management Real Assets and Macquarie Infrastructure Debt Investment Solutions.

Henrik Nøhr Poulsen, PFA’s executive director for equities and alternative investments, said: “We have specifically focused on entering the market for major offshore wind farms as we believe it holds great potential.

“The Walney Extension Offshore Wind Farm investment represents a considerable extension of our portfolio of alternative investments, which is expanding as planned and which has become an important element in the overall investment strategy.”

Peter Damgaard Jensen, chief executive of PKA, said it would be the sixth offshore wind farm his company had invested in since 2011.

“Investments in offshore wind farms have given two-digit returns up to now, and we are happy to cement our climate strategy with another offshore wind farm,” he said.

PFA said the purchase included an attractive inflation-adjusted, fixed-price contract that will run for 15 years, providing financial security and a stable long-term return.

The wind farm, located in the Irish Sea, will have 87 wind turbines with a total capacity of 659MW, generating enough electricity to power mroe than 500,000 households.

Have your say

You must sign in to make a comment


Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2503

    Asset class: Equities.
    Asset region: Emerging Markets.
    Size: EUR 30m.
    Closing date: 2019-01-31.

  • QN-2505

    Asset class: Real Estate Core/Core-Plus Multi-sector strategy.
    Asset region: Asia-Pacific.
    Size: $ 50m.
    Closing date: 2019-01-28.

  • QN-2506

    Asset class: Currency Overlay.
    Asset region: Global.
    Size: USD 4 bn..
    Closing date: 2019-02-11.

Begin Your Search Now