A view of turbines at Orsted's offshore wind farm near Nysted, Denmark, September 4, 2023.
Orsted, recognized as the world’s largest offshore wind developer, has been under financial pressure due to rising costs from supply chain disruptions, inflation, and other market uncertainties. The sale of the stake in the 8.5 billion pound ($11.41 billion) project will leave Orsted with 50% ownership while Apollo, a New York-listed investment firm managing over $800 billion in assets, will take the remaining half.
In a statement, Orsted said: “The transaction represents a key milestone in Orsted’s funding plan and balances the key objectives for partnerships and divestments with an emphasis on capital management.” The company added that Apollo’s investment includes both the purchase of a 50% stake and a commitment to finance half of the remaining construction costs.
The Hornsea 3 project, located in the North Sea, will have a capacity of 2.9 gigawatts and is expected to be completed in 2027. Once operational, it will be the world’s largest offshore wind farm, capable of generating enough electricity to power over 3 million homes in the United Kingdom. The project plays an important role in Britain’s renewable energy strategy and in Orsted’s broader goal of expanding its global offshore wind portfolio.
To strengthen its balance sheet, Orsted raised $9.4 billion through a discounted rights issue in October and announced plans to reduce its workforce by about 25% by the end of 2027. On Monday, Orsted’s shares closed at 115 Danish crowns, an 85% decline from their peak in 2021. Despite these challenges, the company continues to pursue long-term investments in offshore wind energy as part of its global growth strategy.
Earlier this year, Orsted decided to discontinue its Hornsea 4 project, citing high supply chain expenses, increased interest rates, and greater execution risks. The cancellation is expected to cost the company up to 5.5 billion Danish crowns. Nevertheless, Orsted remains focused on advancing its major projects, including Hornsea 3, to sustain its leadership in the offshore wind sector.
The partnership with Apollo marks an important milestone for Orsted, as it seeks to stabilize its financial structure while maintaining progress on one of the largest renewable energy projects in the world. The deal is also expected to enhance collaboration opportunities between European and U.S. investors in large-scale clean energy developments, supporting global efforts toward a more sustainable energy transition.
