ESB takes 'significant first step' into offshore wind in €230m deal
The ESB has acquired its first stake in a near-operational offshore wind farm, in a deal understood to be worth around £200m (€228m).
The commercial semi-State confirmed that it has acquired a 12.5pc sake in the 353MW Galloper wind farm, off the coast of the eastern English county of Suffolk, from Macquarie Capital.
The ESB declined to comment on the value of the deal, but industry publication 'SparkSpread', which first reported the sale, said the 56-turbine Galloper wind farm is valued at £1.5bn (€1.7bn) in total - giving a £200m value for the ESB stake.
The project is big enough to power 380,000 homes.
ESB chief executive Pat O'Doherty said the UK deal was significant for the company in its planned shift away from reliance on fossil fuels.
"This investment represents a significant first step for ESB into offshore wind generation," he said.
"Renewable electricity is a key enabler in the transition to a low-carbon economy, and ESB expects offshore wind to play a pivotal role in this transition," he added.
A spokesman for the ESB said that in addition to the financial investment, the acquisition will give the ESB access to technical and engineering insights in relation to offshore wind ahead of a planned push into the area in Ireland, where it is likely to co-develop assets from scratch.
The company has plans for wind farms in the Irish Sea off the coasts of Louth and Wexford.
The only existing Irish offshore wind farm is the 25-turbine Arklow Bank wind farm off the coast of Wicklow.
Last year, the State-owned electricity company put out a tender seeking "the provision of renewable energy marine services related to offshore wind farms".
It says it is planning to develop or acquire the wind farms from this year.
Macquarie Capital launched the sale of minority stakes in Galloper and its 580MW Race Bank UK offshore wind farm last summer, in an auction code-named Project Alexandrite.
In 2016, Macquarie agreed to sell half of its 25pc stake in Galloper to Sumitomo Corp, while Macquarie subsidiary Green Investment Group also owns a quarter stake in Galloper, according to 'SparkSpread'.
Other shareholders are RWE Innogy and Siemens Financial Services.
In January this year, Galloper shareholders, led by Innogy, began sounding out potential financial advisers to assist in refinancing the wind farm's £1.3bn (€1.5bn) debt load, which was arranged in 2015.
They are thought to be in talks to appoint BNP Paribas.
Here, individual ESB projects are expected to range between 200MW and 500MW in size, though some could be bigger.
Industry sources put construction cost per megawatt for an offshore wind farm in the region of €2m, having fallen in recent years.
That means a 200MW project would cost around €400m, and a 500MW project would cost around €1bn.