Ørsted has struck a deal with Glennmont Partners, a subsidiary of TIAA’s asset manager Nuveen, to sell 50% ownership share in its 900 MW German offshore wind farm Borkum Riffgrund 3.
The transaction, worth approximately DKK9bn ($1.4bn), is Ørsted’s first farm-down to an institutional investor to be signed before taking a final investment decision on the project. The deal includes the acquisition of 50% ownership and the commitment to fund 50% under the engineering, procurement and construction (EPC) contract for the entire wind farm.
As part of the agreement, Ørsted will construct the wind farm under a full-scope EPC contract, 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. Ørsted said it has designed a 20-year offtake agreement that provides Glennmont with a combination of fixed price and collared prices for 15 years for the majority of their share of the volumes whilst also leaving certain volumes exposed to market power prices.
The Borkum Riffgrund 3 wind farm in the German North Sea, which was awarded at €0 per MWh in 2017 and 2018, is expected to be commissioned in 2025, subject to Ørsted’s final investment decision, which is expected by the end of 2021. Ørsted has so far signed long-term fixed price corporate power purchase agreements (PPAs) on Borkum Riffgrund 3 for a total of 450 MW.