Apollo, an alternative assets manager, has acquired 50% ownership of Hornsea 3 - Ørsted’s offshore wind farm in the UK. The $6.5bn investment was led by Apollo-managed funds and includes Canadian institutional investors La Caisse and PSP Investments as co-investors.
“We are pleased to partner with Ørsted on this transaction where Apollo Fund capital can help to power over 3 million UK homes. This is the latest large-scale transaction here in Europe where we are investing behind energy infrastructure, transition assets, AI and other key priorities”, said Leslie Mapondera, Apollo partner and co-head of European credit.
Hornsea 3 is Ørsted’s third giga-watt scale project in the North Sea. Once completed, it has an expected capacity of 2.9GW powered by 197 offshore wind turbines. Apollo’s investment will also support half of the project’s remaining construction costs. The combined Hornsea zone - which includes Hornsea 1 and 2 - will have a cumulative capacity of 5GW.
“Ørsted is a global leader in offshore wind power and Hornsea 3 is its most significant project yet, with capacity to bring reliable, renewable energy to millions of homes across the UK. Through this investment, we are proud to deliver a scaled and comprehensive solution for infrastructure that will promote energy security and the UK’s net zero ambitions”, commented Apollo Infrastructure partner Adam Petrie.
For Ørsted, Apollo’s investment is intended to support its capital management plan and sits against the backdrop of declining Ørsted share prices in recent months. “We’re pleased to welcome Apollo as a partner for Hornsea 3, as they bring infrastructure expertise and scaled capital”, said the company’s CFO, Trong Westlie.
“The divestment represents an important milestone for Ørsted as we continue to deliver on our partnership and divestment programme, which is a cornerstone of our business plan”, Westlie added.
RBC Capital Markets acted as Apollo's sole financial adviser for the transaction which is subject to regulatory approvals and expected to close by the end of the year. A statement from Apollo confirmed that while $3.25bn will be invested up front, the remaining $3.25 will be invested once the project reaches ‘certain construction and development milestones.’
