Wind Turbine Blades

WFW advises DONG Energy on £644 million sale of 25 per cent stake in London Array 1 to Canadian pension fund

16 April 2014

Watson, Farley & Williams (“WFW”), a leading international law firm, is pleased to announce that it has advised DONG Energy (“DONG”) on the £644 million sale of a 25 per cent stake in the London Array 1 offshore wind project to a special purpose vehicle owned and controlled by Caisse de dépôt et placement du Québec (“CDPQ”).

The transaction sees the Quebec-based pension fund, which manages the pension contributions of public sector workers in the Canadian province, acquire half of DONG’s 50 per cent interest in the 630MW wind farm. London Array 1 is the world’s largest offshore wind farm, comprising 175 turbines covering an area of 90km2, and is located off the coast of Kent, England. London Array 1 went online in July 2013.

CDPQ enters the existing joint venture with a 25 per cent ownership share alongside DONG (25 per cent), E.ON (30 per cent) and Masdar (20 per cent). DONG will remain the provider of O&M services to London Array 1.

One of the leading energy groups in Northern Europe, DONG is involved in the procurement, production, distribution and trading of energy and related products in Northern Europe. With this partnership divestment DONG delivers on the fifth and final point in its financial action plan, presented in February 2013: securing the foundation for the future growth of DONG.

Samuel Leupold, executive vice president of DONG Energy Wind Power said: “Farm down of our ownership shares in wind projects is a central part of our business model and our strategy is to continuously enter into partnership agreements with industrial and financial partners to extract part of the value creation from our projects, share the risk in our portfolio and attract capital to be able to continue to invest in new offshore wind farms.”

The WFW team was led by London-based partner Evan Stergoulis (Energy & Projects), who was supported by a deal team including partners Nick Fothergill (Corporate), Gary Ritter (Real Estate) and Richard Stephens (Tax) and associates Ravinder Sandhu (Corporate), Joe Hesketh (Energy & Projects), Charlotte Corble (Energy & Projects) and Simon Folley (Real Estate).

Partner Evan Stergoulis, head of the energy sector at WFW, said: “We are delighted DONG, our longstanding client has been able to tap into our strong knowledge of the sector to divest a 25 per cent stake in London Array 1. This shares the risk in the developer’s portfolio and raises capital to invest back into new offshore wind projects. It was particularly pleasing to see one of the biggest institutional investors in the world making its first investment in this sector.”