Who says offshore wind is down and out? Apollo Global Management will purchase a 50% stake in Hornsea 3, the largest offshore wind development in the world, located on the UK’s east coast. The New York-based private equity firm will also fund half of Hornsea 3’s remaining construction costs.
When the wind farm is completed in 2027, it is expected to have a generation capacity of 2.9 gigawatts — enough power to provide low-cost, renewable electricity for more than 3 million UK households.
The deal “represents an important milestone,” said Trond Westlie of Ørsted, the beleaguered Danish renewable energy developer behind the project. Ørsted is looking to sell a stake in its projects to investment partners to free up capital for future projects. As a partner in Hornsea 3, Apollo will “bring infrastructure expertise and scaled capital,” Westlie said.
US wind fallout
The transaction comes amid political headwinds and capital-raising challenges for Ørsted, especially in the US, where President Donald Trump has declared war on offshore wind.
The Danish company last month raised $9.4 billion via a dilutive rights offering to strengthen its financial position. Ørsted plans to cut its global workforce by about 2,000 jobs, or 25%, by the end of 2027 as it focuses on Europe.
Ørsted received a stop-work order from the Trump administration in August for a 700-megawatt offshore wind project in Rhode Island that was 80% complete; a federal judge overturned the stop-work order in September, allowing the project to continue.
A federal judge in Washington yesterday ruled that Trump can reconsider a Biden-approved wind farm development off the coast of Nantucket, Mass. The project would have generated up to 2,400 megawatts of wind energy to power over 800,000 homes in New England.
Pivot to Europe
Apollo will invest half of the $6.5 billion once the Hornsea 3 transaction closes later this year, and deploy the other half over the next two years as the project reaches certain milestones.
“This is the latest large-scale transaction in Europe, where we are investing behind energy, critical infrastructure and transition assets in the region,” Apollo’s Marc Rowan said on yesterday’s Q3 earnings call. Apollo has invested a record $17 billion in energy infrastructure deals in Europe this year, the Financial Times reports.
