United Kingdom

United Kingdom

Dong sells Burbo Bank Extension stake to repeat investors

UK: Dong Energy has sold a 50% stake of its 258MW Burbo Bank Extension project to Danish pension fund PKA and investment firm Kirkbi, owner of the Lego Group.

MHI Vestas's V164 8MW turbine will power the 258MW Burbo Bank Extension
MHI Vestas's V164 8MW turbine will power the 258MW Burbo Bank Extension

The two new investors will each own 25% of the project, located in the Irish Sea, 7km from the UK's west coast.

Dong said the total combined purchase price for the investors would be approximately £660 million (€848 million) paid over 2016 and 2017.

The developer's investment strategy involves selling up to 50% of its offshore projects to free up capital to put in to future projects.

Onshore construction work at the Burbo Bank Extension is under way, with offshore installation set  to begin this spring.

The project will comprise 32 MHI Vestas V164 8MW turbines and completion is expected in the first half of 2017.

It is the second time Kirkbi — 75% owner of toy-maker Lego Group — has partnered with Dong on an offshore project. In 2012, it acquired a 32% stake in the 312MW Borkum Riffgrund 1 site in Germany. This project was brought online in early 2015.

"This investment is another substantial step for the Lego Group towards balancing our global energy consumption with renewable energy capacity. Our goal is to fulfil this by 2020," said Lego Group CEO Jørgen Vig Knudstorp.

Pension fund manager PKA has invested in four other offshore projects, two of which were developed by Dong Energy.

PKA owns a 20% interest in Dong's 400MW Anholt project in Denmark, and 24.75% of the 252MW Gode Wind 2 site under construction in Germany.

In September 2015, Dong sold a 50% stake in the 330MW Gode Wind 1 project to German private equity firm Global Infrastructure Partners for €780 million.

PKA also has a 22.5% stake in WPD's 288MW Butendiek development, which was completed in September 2015. And in 2013, PKA provided a €120 million subordinated loan to the 600MW Gemini project in the Netherlands.

Have you registered with us yet?

Register now to enjoy more articles
and free email bulletins.

Sign up now
Already registered?
Sign in