Global alternative investment manager Apollo announced an agreement to acquire a 50% stake in one of the world’s largest offshore wind farms, the UK’s Hornsea 3, from energy developer Ørsted, with Apollo committing to invest $6.5 billion to fund the transaction and half of the project’s remaining construction costs.
Located 160 km off the coast of Northern England, Hornsea 3 is expected to be completed around the end of 2027, and to have a capacity of 2.9 GW, providing enough electricity to power more than 3 million UK homes. Combined with the Hornsea 1 and 2 projects, the Hornsea zone will have a total capacity of more than 5 GW, making it the world’s largest operating offshore wind zone.
The transaction forms part of a series of moves by Ørsted to shore up its capital position, following a turbulent period for the company which has faced a challenging political and economic environment, particularly in the U.S., with the Trump administration attempting to reverse the prior administration’s focus on renewable energy, and offshore wind in particular. Ørsted recently announced that it will reduce its workforce by around 25% through 2027 as it shifts focus more on offshore wind and Europe, and the company completed a dilutive rights issue in October, raising approximately $9.4 billion.
Ørsted described the transaction as “a key milestone” in its funding plan.
Ørsted Group CFO Trond Westlie said:
“We’re pleased to welcome Apollo as a partner for Hornsea 3, as they bring infrastructure expertise and scaled capital. We look forward to working with them to deliver this important project that will produce enough electricity to power more than 3 million UK homes once completed and contribute to the renewable transformation of the UK. The divestment represents an important milestone for Ørsted as we continue to deliver on our partnership and divestment program, which is a cornerstone of our business plan.”
The acquisition marks the latest in a series of large-scale energy transition-focused investments by Apollo, with recent transactions including a €3.2 billion commitment to fund investments in expanding the transmission grid in Germany in a new JV with RWE, a £4.5 billion financing commitment to EDF for its Hinkley Point C nuclear power plant, and the launch earlier this year by the firm of a $3 billion strategic partnership with UK-based banking group Standard Chartered, focused on accelerating financing for infrastructure, clean transition and renewable energy.
Apollo Partner and Co-Head of European Credit Leslie Mapondera said:
“At Apollo, we look to serve as a scaled provider of long-term and flexible capital solutions for leading companies and infrastructure. We are pleased to partner with Ørsted on this transaction where Apollo Fund capital can help to power over 3 million UK homes. This is the latest large-scale transaction here in Europe where we are investing behind energy infrastructure, transition assets, AI and other key priorities.”
