Ørsted announced it signed a deal with Stonepeak where Ørsted will divest to Stonepeak an equity ownership stake in a portfolio that includes four US onshore wind farms with a total capacity of 957 MW. As part of a continuation of Ørsted’s farm-down program, this deal represents the company’s first partnership with Stonepeak and the second major farm-down of multiple assets within the US. The value of the deal is about $300 million.
Ørsted previously raised about $700 million in tax equity proceeds for this portfolio, bringing the total proceeds raised to about $1 billion. Stonepeak will receive 80% of the cash distributions associated with the projects, while Ørsted will continue operating the asset portfolio.
As part of the deal, Ørsted retains a unilateral call option for Stonepeak’s interests that could be exercised under certain circumstances after the transaction’s closing. While structured differently, the deal broadly corresponds to Ørsted’s historical farm-down approach, in which ownership shares of existing operating assets are divested to recycle and redeploy capital for future value-creating projects. This unique partnership structure allows Ørsted to maximize capital redeployment while also retaining operational decision-making and long-term optionality around the portfolio.
The portfolio consists of four wind farms across three states: The Ford Ridge Wind project in Illinois; the Helena Wind and Western Trail Wind projects in Texas; and the Sunflower Wind project in Kansas. This deal represents a total capacity of 957 MW across three different markets: the Electric Reliability Council of Texas (ERCOT), Midcontinent Independent System Operator (MISO), and Southwest Power Pool (SPP).
These projects are operational and have power purchase agreements for all or parts of the production capacity. Ørsted will be the managing member of the partnership and will continue providing asset management services to the projects. And Ørsted currently has a portfolio of nearly 6 GW of onshore wind, solar, and battery storage projects in operation and under construction across the US.
KEY QUOTES:
“This deal signifies the value that our US onshore renewable energy projects can deliver to our investors while also demonstrating the holistic and flexible approach we take to partnerships and divestments. While Ørsted will continue to operate each asset over its lifetime, we’ll use this capital to fund projects that continue to create the most value for our stakeholders and fuel our growth in the renewable energy sector.”
- David Hardy, Executive Vice President and CEO of Region Americas at Ørsted
“The need for efficient infrastructure with the power to further the energy transition continues to grow, and onshore wind continues to play a major role in helping to meet that demand. Ørsted’s US onshore assets are young and have been built with trusted technology, which gives us confidence in their potential to make a meaningful and positive long-term impact on the communities they serve. We look forward to partnering closely with Ørsted on this highly contracted, geographically diverse portfolio.”
- Anthony Borreca, Senior Managing Director at Stonepeak
