RWE is selling a 50 percent stake in the North Sea projects Norfolk Vanguard East and West to KKR, the DAX-listed group announced on Wednesday. Financial details of the transaction, which is expected to close this summer, were not disclosed. RWE had secured the projects as part of a renewable energy auction in the UK.
The shares of Germany's largest utility rose by as much as 3.5 percent, reaching their highest level in nearly 15 years. RWE is seen as a major beneficiary of the seventh auction round, one trader said. Alongside British utility SSE, RWE is among the project developers who won guaranteed electricity price contracts.
RWE AWARDED CONTRACTS FOR FIVE WIND FARM PROJECTS
According to the British government, contracts were awarded in the auction for projects with a total capacity of 8.4 gigawatts (GW). This is enough to supply around twelve million households with electricity, it was stated. Offshore wind power is a key component of the government's plans to largely decarbonize the UK's power sector by 2030. "This is a monumental step toward clean energy by 2030," said Energy Minister Ed Miliband.
In the auction, RWE was awarded not only Norfolk Vanguard East and West but also the two RWE Dogger Bank South projects and the RWE Awel y Môr project in the Irish Sea. RWE CEO Markus Krebber emphasized: "We are very pleased that in the recent UK offshore wind auction we were able to secure long-term offtake contracts for five projects."
RWE AND KKR TEAM UP ON TWO PROJECTS
RWE and KKR plan to jointly develop, build, and operate the two North Sea wind farms. KKR stated that total development and investment costs for the wind farms, which are scheduled to go into operation in 2029 and 2030, will exceed $15 billion. "This investment underscores our conviction about the long-term importance of renewable energy in the UK," said Vincent Policard, Co-Head of European Infrastructure at KKR. Offshore wind power will play a central role in the country's energy transition.
This is not the first time RWE has sold stakes in wind farms. Last year, the group sold 49 percent of two projects in Denmark and Germany to the Norwegian sovereign wealth fund for €1.4 billion. Such partnerships, also known as "farming down," are common in the industry to share the high costs of large offshore projects. According to KKR, the firm has invested more than $31 billion globally in the energy transition since 2011, including in German project developer Encavis. Both parties also plan to explore opportunities for further collaboration on additional projects.
(Report by Christoph Steitz, written by Anneli Palmen, edited by Myria Mildenberger. For inquiries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)
