Danish energy company Ørsted’s 50% stake in the two offshore wind farms are not impacted by the announced deal
Eversource Energy to sell its stakes in the South Fork Wind and Revolution Wind projects to GIP. (Credit: South Fork Wind)
Eversource Energy has agreed to sell its 50% stake in the 132MW South Fork Wind and 704MW Revolution Wind offshore projects in the US to Global Infrastructure Partners (GIP) in an all-cash deal worth around $1.1bn.
The deal will mark the exit of the New York Stock Exchange (NYSE)-listed Eversource Energy from the two offshore wind projects, while retaining certain cost sharing responsibilities for the construction of the Revolution Wind facility.
Eversource Energy will equally share the funding obligations with GIP for up to $240m of capital expenditure overruns in the wind projects. After this, GIP will assume responsibility for additional overruns.
The financial exposure of Eversource Energy will be adjusted upon Revolution Wind’s commercial operation and South Fork Wind’s closing. The South Fork Wind project is expected to begin operations before the deal closes.
Revolution Wind is set to begin operation in 2025, and Eversource Energy’s ties to South Fork Wind will be mostly resolved at closing, except as a tax equity partner. Proceeds from the sale will be used to repay parent debt.
Danish energy company Ørsted’s 50% stake in the two offshore wind farms are not impacted by the announced transaction.
GIP chairman and CEO Bayo Ogunlesi said: “This acquisition marks our fourth strategic joint venture with Ørsted, further solidifying our strong partnership with leading industry players. The South Fork Wind and Revolution Wind projects benefit from long-term offtake agreements and play a pivotal role in addressing the increasing demand for clean electricity.”
Eversource Energy is anticipated to engage in a separate construction management agreement, serving as a contractor for Revolution Wind to finalise the ongoing onshore work. Furthermore, the company will uphold its previously disclosed tax equity investment in South Fork Wind.
Eversource Energy chairman, president, and CEO Joe Nolan said: “We continue to believe that offshore wind represents the most significant opportunity to decarbonise the electric generation footprint of New England.
“Eversource will remain an integral player in this historic shift to a clean energy generation mix by focusing on our strengths as a regulated transmission builder and operator and bringing the benefits of these investments to our customers.”
Completion of the transaction necessitates regulatory approvals from the US Federal Energy Regulatory Commission, alongside customary antitrust filings and approvals from the New York Public Service Commission.
Eversource Energy has enlisted Goldman Sachs as its financial adviser and Ropes & Gray as its legal counsel for the transaction.