Schroders Buys Stake In UK Offshore Wind Project

Schroders, a global investment manager, through its renewable infrastructure investment vehicle Schroders Greencoat, has declared the acquisition of a major stake in a major UK offshore wind farm. The transaction includes the acquisition of a 24.5% shareholding in the West of Duddon Sands wind farm from Danish energy behemoth Ørsted for £456.1 million (or about USD $610 million). This deal further solidifies Schroders' footprint in the renewable energy space while assisting Ørsted with its long-term capital recycling plan.

The West of Duddon Sands wind farm, situated approximately 14 kilometers off the west coast of the United Kingdom, began operation in 2014. The wind farm, with a generation capacity of 389 megawatts (MW), contributes significantly to the renewable energy of the UK. Even after the sale, Ørsted will retain a 25.5% stake in the wind farm and continue to operate the facility, thus maintaining continuity in management and operations.

The deal is a part of Ørsted's overall "farm-down" strategy, where it sells partial ownership of its operating assets. The model enables the company to free up capital invested in ongoing projects and channel it into new opportunities. In the view of Ørsted, the deal proceeds will fund its ambitious program of self-financing over 8 gigawatts (GW) of offshore wind development projects. When completed, the program will effectively double Ørsted's installed offshore wind capacity, reaffirming its market leadership in the global renewable energy sector.

On the transaction, Trond Westlie, Ørsted Group CFO, emphasized the key role of partnerships in the business model of the company. He highlighted that Schroders Greencoat has an impressive record of dealing with renewable energy infrastructure assets and stressed the benefits of sustaining partnership. "Today's announcement we continue to deliver on our farm-down program with a transaction that meets our strategic objectives for partnerships and divestments in terms of value creation, risk diversification, and capital recycling," Westlie said.

This is not the first partnership between Ørsted and Schroders Greencoat. The two companies already have a working relationship through their joint ventures on a number of other offshore wind farms, such as Walney, Burbo Bank Extension, Hornsea 1, and Borkum Riffgrund 1. These prior collaborations have established a corner of trust and strategic alignment between the companies, which is further enhanced by the recent transaction.

Schroders Capital, the private markets investment arm of Schroders, views this acquisition as one of its plans to achieve long-term, stable returns while contributing significantly to the global energy transition. Minal Patel, Global Head of Infrastructure at Schroders Capital, explained that the investment in West of Duddon Sands is consistent with the firm's long-term vision for sustainable infrastructure. We are very delighted to enhance our profile through this long-term arrangement with Ørsted," she stated. Patel reiterated that the wind farm is a high-quality asset with resilient, inflation-linked cash flows. She also mentioned the asset's resilience in light of prevailing market uncertainty, explaining that such investment is central to the provision of secure returns and furthering decarbonization in energy systems.

The deal reaffirms Schroders Greencoat's focus on renewable energy infrastructure and its faith in the long-term worth of in-service offshore wind assets. As the planet hastens the transition to clean energy, alliances such as these have a critical role to play in funding and supporting infrastructure underpinning carbon reduction goals. The transaction also represents an emerging trend among institutional investors who are increasingly committing capital to proven renewable energy projects that provide stable income streams and support environmental, social, and governance (ESG) goals.

As global energy systems experience a fast transition, the sale between Schroders and Ørsted showcases the way strategic partnerships and investment in renewable infrastructure can bring mutual benefits—improving capital efficiency for developers as well as enabling institutional investors access to stable, future-proofed assets. This transaction, underpinned by traditional partnership and common sustainability agendas, is a demonstration of the dynamism of energy investment and the critical role played by capital markets in supporting the transition to clean energy.