Apollo acquires half of UK offshore windfarm

Apollo, a global alternative investment manager, has announced an agreement to acquire a 50% stake in the UK’s Hornsea 3 offshore wind farm from energy developer Ørsted. Apollo is committing $6.5 billion to fund the transaction and cover half of the remaining construction costs. Hornsea 3, situated 160 km off the coast of Northern England, is expected to be completed by the end of 2027. It will have a capacity of 2.9 GW, sufficient to supply electricity to over 3 million UK homes. Together with the Hornsea 1 and 2 projects, the Hornsea zone will boast a total capacity exceeding 5 GW, making it the largest operating offshore wind zone globally.

This transaction is part of Ørsted’s strategy to strengthen its capital position amid a challenging political and economic climate. The company has faced difficulties, particularly in the U.S., where policy shifts have impacted the renewable sector. Ørsted plans to reduce its workforce by about 25% by 2027, refocusing efforts on offshore wind and European markets. In October, Ørsted completed a rights issue, raising approximately $9.4 billion. Ørsted describes the transaction with Apollo as “a key milestone” in its funding strategy.

Ørsted Group CFO Trond Westlie expressed satisfaction at partnering with Apollo, citing their infrastructure expertise and capital resources. He emphasised the importance of the project in contributing to the UK’s renewable energy transformation.

This acquisition is the latest in Apollo’s series of investments focusing on energy transition. Recent transactions include a €3.2 billion commitment to a joint venture with RWE to expand Germany’s power grid, a £4.5 billion financing for EDF’s Hinkley Point C nuclear plant, and a $3 billion partnership with Standard Chartered to accelerate infrastructure and renewable energy financing.

Leslie Mapondera, Apollo Partner and Co-Head of European Credit, highlighted the firm’s role in providing long-term and flexible capital solutions. He expressed enthusiasm for partnering with Ørsted to power over 3 million UK homes through this significant transaction.

RBC Capital Markets acted as the sole financial advisor to Apollo for the transaction. Senior financing is led by Apollo-managed entities, with bank facilities underwritten by BNP Paribas, ING Bank, Lloyds, and RBC Capital Markets. Co-investors include La Caisse and PSP Investments.