'Fuel continued growth' | Orsted sells US wind and solar assets in first onshore divestment

Danish renewables giant Orsted for the first time has closed a deal to divest onshore wind and solar assets, in a move it says will help to fuel its continued growth in land-based green power.

The global offshore pacesetter will sell a 50% stake in the onshore wind farms Lincoln Land, Plum Creek, and Willow Creek, as well as the Muscle Shoals PV project, spread across four US states, for $410m to Energy Capital Partners (ECP), an energy transition-focused investor.

The already operational projects with a combined capacity of 862MW in Illinois, Nebraska, South Dakota, and Alabama all have power purchase agreements for all or parts of their production capacity.

“I’m excited about bringing in such a leading investor as ECP, who has a proven and established track record in power and renewables, for the first farm-down in our onshore business,” said Orsted Onshore chief executive Neil O`Donavan.

“I consider this transaction another key milestone in the onshore journey and a testament to the value our projects create. Our ability to raise capital will fuel our continued onshore growth.”

The deal follows an asset rotation strategy Orsted has pursued in offshore wind of selling parts of projects that are already operational or nearing completion to fund continued expansion. The deal with ECP is also the first time the Danish developer has used its farm-down programme to divest multiple assets in one transaction.

The transaction was funded via Renewable Power Fund Plus, a partnership between ECP and Teachers Insurance and Annuity Association of America (TIAA), along with debt financing from Mitsubishi UFJ Financial Group (MUFG). Renewable Power Fund Plus now owns 50% of a newly established company holding the four projects.

“We are pleased to invest in this diverse portfolio of operating wind and solar assets, underpinned by long term investment grade cash flows in attractive markets,” ECP partner Schuyler Coppedge said.