Ørsted has divested a 50% equity stake in three US onshore solar and battery projects to Energy Capital Partners (ECP), an investor in energy transition, for $572m.
The divestment comprises Texas-based Mockingbird Solar (468MW) and Sparta Solar (250MW), and the Eleven Mile Solar Center in Arizona, which combines 300MW solar and 300MW/1,200 megawatt hours battery storage.
All three projects have secured tax equity partnerships and power purchase agreements. Operations are set to commence in late 2024.
The transaction aligns with Ørsted’s divestment programme and will generate proceeds to support its mid and long-term targets.
Ørsted commercial head for the Americas James Giamarino stated: “These transactions reflect our close engagement with a range of commercial partners, including our tax equity and transferability partners, which are all key to the growth of Ørsted’s US onshore portfolio.
“As we make further progress on our growth ambitions, we’ll use this recycled capital to continue the buildout of projects that create long-term value for our partners.”
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The remaining 50% equity ownership in the projects will be held with Ørsted, which will continue operations throughout their lifespan.
The financial impact of the transaction will be recognised across the fourth quarter (Q4) of the fiscal year 2024 and Q1 2025, subject to conditions precedent.
In 2024, Ørsted raised $734m in upfront proceeds from tax equity partner JP Morgan and signed its first long-term tax credit transfer agreement for the Mockingbird Solar Center.
The total proceeds from the divestment and tax equity funding exceed $1.3bn.
The move builds on Ørsted’s existing partnership with ECP, which acquired a 50% equity stake in three wind farms and one solar farm in 2022.
Ørsted partnership and mergers and acquisitions Americas head Cody Castaneda stated: “Ørsted is excited to bring on ECP as a partner in these additional assets.
“Our continued partnership reflects the valuable benefits that our diverse portfolio provides for investors, and we’re grateful to ECP for sharing our commitment to supporting the expansion of renewables and American energy generation.”
ECP principal Matt Himler said: “These projects are prime examples of the kind of large-scale clean energy infrastructure the US needs to meet the growing electricity demand.
“We’re pleased to expand our partnership with Ørsted, and to invest in their diversified portfolio of contracted solar and battery storage assets in high-load growth markets. We look forward to leveraging our extensive sector expertise and track record in renewables to deliver carbon-free energy to Arizona and Texas.”
With the addition of Mockingbird, Eleven Mile and Sparta Solar, Ørsted’s US portfolio now exceeds 6GW of onshore wind, solar and battery storage projects.
