Stake bought by two Danish pension funds in a deal worth £2 billion

Orsted (formerly Dong Energy) has agreed to sell 50 per cent of Walney Extension offshore wind farm to two Danish pension funds – PKA and PFA – in a deal worth £2 billion.

Under the agreement, each of the pension funds will obtain a 25 per cent stake in the 659MW wind farm, which will be the world’s largest wind farm when it is commissioned next year.

According to the company, the total sales price amounts to around £2 billion, which will be paid during 2017 and 2018.

Orsted’s chief executive, Henrik Poulsen, said the company already has a “strong relationship” with PKA on three other offshore windfarms and it looks forward to “building an equally-long lasting relationship with PFA”.

“Both partners are committed to the green energy transition and I’m pleased that our offshore wind assets continue to be attractive to institutional investors,” added Poulson.

Following the announcement, Orsted revealed it increased its EBITDA (earnings before interest, tax, depreciation and amortization) guidance for 2017 from DKK 17-19 billion to DKK 19-21 billion.

The Danish energy company has also published details of its interim financial report for the first nine months of the year.

The report states operating profit (EBITDA) for the first nine months amounted to DKK 9.5 billion, corresponding to an underlying growth of 11 per cent, which “lived up to our expectations”.

But underlying operating profit (EBITDA) was 10 per cent lower for third quarter of this year, compared with the same three months in 2016.

While earnings from the company’s operating offshore windfarms increased by 39 per cent, driven by ramp-up generation from new offshore windfarms.

The report states the decrease in remaining earnings was primarily due to partnership income in Wind Power being higher in the third quarter of last year.

“The divestment of our upstream oil and gas business to INEOS was a milestone in our strategic transformation from black to green energy,” added Poulsen.

“Our vision is to create a world that runs entirely on green energy. We expect that more than 95 per cent of the power and heat we generate in 2023 will be green.

“In Q3 2017, we increased generation from our offshore wind farms and at the same time we strengthened our long-term development pipeline with the world’s largest offshore wind farm Hornsea 2 with a capacity of 1.4GW, which will be completed in 2022,” he added.

“This will be our first offshore wind farm, which can generate power at a lower price than newly constructed coal and gas-fired power stations. This is a major breakthrough, both for Orsted and the green transformation.”

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