Ørsted secures $6.5bn from Apollo to co-fund Hornsea 3 offshore wind farm

Apollo is investing $6.5bn (€5.6bn) to become a 50% shareholder in Ørsted’s Hornsea 3 UK offshore wind farm project.

Apollo Infrastructure is investing the capital to gain a half stake and to help fund the project in the North Sea in a joint venture with energy firm Ørsted.

As part of the agreement, Ørsted will continue to construct the wind farm and will provide long-term operations and maintenance services as well as route-to-market for power generation.

Located 160km off the Yorkshire coast in Northern England, the 2.9GW Hornsea 3 offshore wind farm, once completed, will be the world’s largest offshore wind project, producing enough electricity to power more than 3m UK homes.

Adam Petrie, partners, Apollo Infrastructure, said: “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.

“Through this investment, we are proud to deliver a scaled and comprehensive solution for infrastructure that will promote energy security and the UK’s net zero ambitions.”

Leslie Mapondera, Apollo partner and co-head of European credit, said: “At Apollo, we look to serve as a scaled provider of long-term and flexible capital solutions for leading companies and infrastructure.

“We are pleased to partner with Ørsted on this transaction, where Apollo fund capital can help to power over 3m UK homes. This is the latest large-scale transaction here in Europe where we are investing behind energy infrastructure, transition assets, AI and other key priorities.”

Trond Westlie, Ørsted Group CFO, said, “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 3m 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 program, which is a cornerstone of our business plan.”

Funding structure for the Hornsea 3 offshore wind farm

Apollo funds are committed to investing approximately $3.25bn at closing, with the remaining $3.25bn to be funded upon achieving specific construction and development milestones in the coming years.

Apollo-managed entities are leading the transaction’s senior financing, alongside bank facilities underwritten by BNP Paribas, ING Bank, Lloyds and RBC Capital Markets.

Co-investors include Canadian investors La Caisse, which committed both equity and debt, and PSP Investments, which contributed to the debt financing.

To read the latest IPE Real Assets magazine click here.