HomeWorld RegionsAsiaDong sells 50 per cent of UK wind operation for à‚£1.6bn

Dong sells 50 per cent of UK wind operation for à‚£1.6bn

Denmark’s Dong Energy has opted to sell half of its Race Bank wind farm to Australian investment bank Macquarie, in a deal worth à‚£1.6bn.

It’s the Australian group’s biggest investment in offshore wind power yet, and also raised the profits for Dong, whose chief executive Henrik Poulsen acknowledged a successful 2016.
Dong turbine
We have had a really good yearࢀ‰.ࢀ‰.ࢀ‰.ࢀ‰and made significant strategic and operational progress in all business units [which] have delivered better than expected or to the high end of our expectations,” Poulsen said.

Race Bank, which is located about 17 miles off the north Norfolk and Lincolnshire coasts will produce enough electricity to power more than 400,000 British households once fully commissioned in 2018.

The deal led Dong to increase its 2016 operating profit forecast to $3.4bn-$3.5bn this year, up about 14 per cent from an earlier guidance range.

As part of the UK deal, Macquarie has agreed to fund half of the capital expenditure costs for the project, which will have a generation capacity of 573 MW and is in advanced stages of construction. It is being financed with a mixture of debt and equity.

Chris Archer, the Macquarie managing director who led negotiations with Dong, predicted that offshore wind power prices would continue to decline on both sides of the North Sea as the industry matures. Returns on investment would remain attractive despite falling prices, he said, because of lower construction costs and the increasing scale of projects.