Norges Bank Investment Management (NBIM), an entity running Norway's $1.3 trillion sovereign wealth fund - popularly known as the oil fund - has agreed to acquire 50 percent in the Borssele 1 & 2 offshore wind farm in the Netherlands from the Danish offshore wind developer Ørsted in what is the fund's first unlisted renewable energy infrastructure investment.
The 752 MW offshore wind farm was commissioned in the fourth quarter of 2020 and generates electricity to the equivalent of one million households' annual power consumption in the Netherlands.
Orsted, based in Denmark, said the value of the deal was around 1,375 billion euros (around $1,63 billion) which is to be paid upon closing of the transaction. Closing is expected around summer 2021.
As part of the agreement, Ørsted will continue to provide long-term operations and maintenance (O&M) services from its O&M base at the Port of Vlissingen in the Netherlands. Also, Ørsted will provide NBIM with balancing services and a long-term route to market for the renewable electricity generated by Borssele 1 & 2.
According to Ørsted, the Borselle 1&2, located 23 km off the coast of the Dutch region of Zeeland at water depths ranging from 14 to 36 meters, is the largest operational offshore wind farm in the Netherlands - and the second-largest operational offshore wind farm in the world - with an installed capacity of 752 MW.
Today's agreement marks NBIM's first investment in unlisted renewable energy infrastructure, Ørsted said. The Norwegian wealth fund was set up years ago to invest revenues derived from the country's oil production. Today, the fund has a small stake in more than 9,000 companies worldwide, including the likes of Apple, Nestlé, Microsoft, and Samsung. On average, the fund holds 1.4 percent of all of the world’s listed companies.
Commenting on the Borselle 1 & 2 deal, Martin Neubert, Chief Commercial Officer and Deputy Group CEO of Ørsted, says: "As one of the world's largest institutional investors, Norges Bank Investment Management is making a difference by making sustainable investments. We're delighted to welcome NBIM as partner on Borssele 1 & 2, which is a landmark project for the Netherlands' transition to renewable energy, and we're pleased to support NBIM in their strategy to invest in renewable energy infrastructure assets."
Mie Holstad, Chief Real Assets Officer at Norges Bank Investment Management, says: "We are very pleased to partner on Borssele 1&2 with Ørsted, the market leader in offshore wind. We are excited to have made our first unlisted investment in renewable energy infrastructure, and we look forward to working alongside Ørsted on delivering green energy to Dutch households."
"Unlisted renewable energy infrastructure is a new asset class for the fund, which we invest in to improve the overall diversification of the fund. We look forward to continuing to execute on our investment strategy for unlisted renewable energy infrastructure," says Nicolai Tangen, Chief Executive Officer at Norges Bank Investment Management.
Steven Engels, General Manager for Ørsted Benelux, says: "I look forward to working with NBIM on delivering green power to the Dutch energy mix. Borssele 1 & 2 kickstarted the Netherlands' ambitious program for offshore wind build-out and will help the country meet its 2030 carbon reduction goals. We remain committed to the Netherlands and the Zeeland region to contribute to the energy transition for many years to come. At the same time, the wind farm creates benefits for the local economy by supporting employment and skills development."
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