US utility Eversource Energy has finalised an agreement to divest its 50% stake in two offshore wind projects in the US to Global Infrastructure Partners (GIP) for $1.1bn.
The transaction encompasses Eversource's shares in the 704MW Revolution Wind and the 132MW South Fork Wind projects.
Revolution Wind will be located 19km from Martha’s Vineyard and the South Fork Wind projects will be 56km from Montauk Point, New York.
The deal does not impact Ørsted's equal ownership in these ventures and it will retain its 50% interest in both.
Eversource is also set to enter a separate construction management contract to continue the onshore work for Revolution Wind.
Eversource Energy chairman, president and CEO Joe Nolan stated: “We continue to believe that offshore wind represents the most significant opportunity to decarbonise the electric generation footprint of New England.
“Eversource will remain an integral player in this historic shift to a clean energy generation mix by focusing on our strengths as a regulated transmission builder and operator and bringing the benefits of these investments to our customers.”
The company will keep its tax equity investment in South Fork Wind, as previously announced.
The proceeds from the sale may be subject to adjustments based on final construction costs and the updated economics of the projects once operative.
The South Fork Wind project will be operational before the deal's expected closure in mid-2024. This will settle most of Eversource's financial involvement, barring its role as a tax equity partner.
The agreement includes cost-sharing obligations in which Eversource and GIP will equally cover up to $240m in potential capital expenditure overruns.
Should costs exceed this threshold, Eversource will bear the additional overruns in line with the existing joint venture terms. Revolution Wind is set to begin operations in 2025.
The proceeds from the sale are earmarked for repaying parent debt by the company.
The deal follows the company’s recent agreement to sell its 50% interest in the 924MW Sunrise Wind project to Ørsted.
This sale is contingent on the successful award of the New York State Energy Research and Development Authority's NY04 offshore wind renewable energy credits agreement request for proposal, and other conditions.
Before the sale to GIP concludes, Ørsted and GIP plan to establish definitive partnerships and service agreements.
GIP chairman and CEO Bayo Ogunlesi stated: “We are pleased to announce our acquisition of a 50% stake in two significant offshore wind projects from Eversource.
“This acquisition marks our fourth strategic joint venture with Ørsted, further solidifying our strong partnership with leading industry players. The South Fork Wind and Revolution Wind projects benefit from long-term offtake agreements and play a pivotal role in addressing the increasing demand for clean electricity.”
