Today, Ørsted has signed an agreement with
The transaction is Ørsted’s first farm-down to an institutional investor to be signed prior to taking final investment decision on the project.
The total transaction value, at completion of the transaction, is expected to amount to approximately
Glennmont, who is wholly owned by the
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 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.
Ørsted has so far signed long-term fixed price corporate power purchase agreements on Borkum Riffgrund 3 for a total of 450 MW. Following the farm-down and the corporate PPAs that have been signed to date, Ørsted’s merchant exposure in the first 10 years will be limited to the fixed and collared tranche agreement under the offtake agreement with Glennmont. Ørsted is continuing to work on an advanced pipeline of additional PPAs with the aim to further optimise the remaining merchant exposure in the first 10 years and in the later years of the project.
“This is a landmark investment for Glennmont. Since Glennmont’s inception over a decade ago we have sought to establish long-term relationships that we can work with on multiple investments for our clients over time, and we’re very happy to once again work with Ørsted to invest in the energy transition. Our clients show a strong interest to invest in clean energy as they seek solid returns whilst decarbonising their portfolio of investments. This interest is underpinned by their confidence in our expertise and ability to deliver value.”
Glennmont will partially finance the acquisition and ongoing funding of its 50 % share through a financing package that was structured and led by Ørsted, and co-arranged by Glennmont. The long-term senior debt facilities, which include a number of unique features that demonstrate a market-leading approach for merchant-exposed offshore wind financings, will be provided by eight banks: Santander, SEB,
The divestment is subject to Ørsted’s final investment decision, which is expected by the end of 2021, and to obtaining project permit and merger and foreign investment clearances. Completion of the transaction is expected in Q4 2021 or Q1 2022.
Facts about Borkum Riffgrund 3
- Borkum Riffgrund 3 will have a total export capacity of 900 MW and will be located in the
German North Sea close to Ørsted's existing offshore wind farms Borkum Riffgrund 1 and Borkum Riffgrund 2. -
The power from Borkum Riffgrund 3 will be generated by 11 MW, 200 m offshore wind turbines from
Siemens Gamesa. - Commissioning of the wind farm is expected in 2025, subject to Ørsted’s final investment decision.
-
In the German offshore wind auctions in 2017 and 2018, Ørsted was awarded the right to build three offshore wind projects, today known under the joint name Borkum Riffgrund 3, with bids of
EUR 0 per MWh. This was made possible by a number of cost drivers, including the installation of next-generation wind turbine technology, very good site conditions and high wind speeds, and anticipated revenue-stabilising power purchase agreements with industrial customers. -
Ørsted is the leading offshore wind developer in
Germany with approx. 1.35 GW in operation (Gode Wind 1&2, Borkum Riffgrund 1&2), and approx. 1,1 GW under construction (Borkum Riffgrund 3 and Gode Wind 3).
The information provided in this announcement does not change Ørsted’s financial outlook for the 2021 financial year or the expected investment level announced for 2021.
For further information, please contact:
Media Relations
+ 45 99 55 94 25
mikon@orsted.com
Investor Relations
Allan Bødskov Andersen
+ 45 99 55 79 96
IR@orsted.com
About Ørsted
The Ørsted vision is a world that runs entirely on green energy. Ørsted develops, constructs, and operates offshore and onshore wind farms, solar farms, energy storage facilities, and bioenergy plants, and provides energy products to its customers. Ørsted ranks as the world’s most sustainable energy company in
About
(www.glennmont.com)
Attachments
- BKR3 farmdown CA final.pdf
© Ritzau Denmark, source