Stonepeak is investing $3bn (€2.76bn) to acquire a 50% stake in Dominion Energy’s planned Virginia offshore wind farm, set to be the largest in the US.
The alternative investment firm has agreed to invest the capital to buy half of the 2.6GW Coastal Virginia Offshore Wind project (CVOW), and will also contribute half of the remaining capital, alongside Dominion Energy, required to fund the construction of CVOW, currently projected at $9.8bn.
The transaction involves Dominion Energy retaining full operational control of the construction and operations of CVOW.
Dominion Energy began developing CVOW, located 27 miles off the coast of Virginia Beach, Virginia in 2013 and is scheduled to begin offshore construction this spring. Construction is expected to be completed by the end of 2026.
Rob Kupchak, senior managing director at Stonepeak, said: “Having previously partnered with Dominion Energy, we look forward to extending our relationship through CVOW, which is a fitting addition to our global renewables strategy given its potential to provide meaningful renewable capacity to the US, advanced stage of development and downside-protected fundamentals.
“Dominion Energy’s impressive track record building and operating large-scale infrastructure projects paired with Stonepeak’s experience successfully constructing offshore wind assets gives us confidence in CVOW’s path forward, and we are excited to partner with Dominion in delivering this critical renewable-energy-generation resource to its customers.”
Robert M Blue, Dominion Energy chair, president and CEO, said: “This transaction achieves several key objectives including: adding an attractive, well-capitalised and high-quality partner; establishing robust cost sharing that provides meaningful protection from any unforeseen project cost increases; and improving our quantitative and qualitative business risk profile through the creation of a highly credit-positive partnership.
“We have reviewed the transaction with our credit-rating agencies and expect the transaction to be viewed as a significant credit-positive, which will ultimately benefit our customers. A financially healthy Dominion Energy with a strong credit profile and balance sheet is optimally positioned to attract the capital we need to provide an exceptional customer experience and support the Commonwealth of Virginia’s economic and environmental goals.”
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