Slaughter and May advised Ørsted on its proposed disposal of a 50% interest in the 1.218MW Hornsea 1 offshore wind farm to Global Infrastructure Partners (GIP). It also advised on the terms of certain related financing, construction, operations and maintenance and power purchase arrangements. Hornsea 1 is currently under construction and will be the world’s largest offshore wind farm when commissioned in 2020.
The transaction is subject to certain regulatory approvals, including from relevant competition authorities, and is expected to close in Q4 2018. The total transaction proceeds, consisting of the acquisition of a 50% ownership share and commitment to fund 50% of the payments under a full scope EPC contract with Ørsted, amount to c.£4.46bn, which will be paid in the period 2018-2020.
GIP will partially finance the acquisition using a multi-tranche financing package of more than £3.5bn, consisting of a mixture of investment grade-rated project bonds, commercial bank loans and mezzanine debt. This financing will be the largest single-project financing to date in the global renewable energy sector.