Macquarie Buys $2 Billion Stake in U.K. Offshore Wind Farm

  • Race Bank project is at advanced stages of construction
  • Project to be commissioned in 2018, Dong Energy says

Macquarie Group Ltd. bought a 50 percent stake in the Race Bank offshore wind farm being developed in the U.K. North Sea from Dong Energy A/S for 1.6 billion pounds ($2 billion).

The investor will split ownership equally between Macquarie Capital and its Macquarie European Infrastructure Fund 5, according to a Dong statement. The 573-megawatt project 17 miles off the coast of Norfolk is due to be commissioned in 2018.

“We have seen a high level of interest from a number of potential investors in Race Bank,” said Samuel Leupold, the head of wind power at Dong. “This proves that our partnership model continues to be attractive.”

Dong gained as much as 5.4 percent, the most in over six months. The stock traded as high as 262 kroner ($37.36), up from 248.7 kroner at yesterday’s close.

The transaction costs include the equity stake and a commitment to fund half of the project’s capital expenditures, according to the statement. The two companies will share risks of construction managed by Dong. The Danish developer will operate and maintain the site when it’s ready.

Race Bank, which will consist of 91 turbines built by Siemens AG, will power 400,000 households when complete.

Macquarie is also a frontrunner in the sale of the U.K.’s Green Investment Bank, according to a person familiar with the process. The bank could be valued as high as 4.2 billion pounds, Shaun Kingsbury, chief executive officer, has said.

“The thing that stands out for me is Macquarie’s appetite in the energy space,” said Keegan Kruger, wind analyst at Bloomberg New Energy Finance. “They are targeting the GIB, fossil fuel assets and now this direct investment, which isn’t their first.”

“This deal also reinforces Dong’s ability to handle construction risk and proves they’re able to divest from an asset before it’s operational, offering the acquirer a larger return profile with added risk,” he said.

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