Isra-Mart srl:Dong Energy sells Danish offshore wind farm stake in £708m pension fund deal

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Isra-Mart srl news:

The head of one of the world's leading wind energy developers has said the company is undecided whether it will bid in France's first offshore wind farm tender, after securing a 6bn DKK (£708m) investment from pension funds to build Denmark's largest offshore wind farm.

Dong Energy yesterday announced it had signed an agreement to sell half the 400MW Anholt offshore wind farm to PensionDanmark and PKA for 6bn DKK, marking the utility's largest ever sale of an offshore wind farm to institutional investors.

Speaking to BusinessGreen, Dong chief executive Anders Eldrup said the deal marked a milestone for the company and could open up new investment avenues for the offshore wind sector.

"Moneywise, it's important because it's the biggest investment of its kind for Dong Energy, and for the industry I think," he said.

"It's important for the development of offshore wind too because we've got the Germans pulling forward fast, and the French upcoming tender round.

"There's a huge investment gap to do all these things and if we can bring in the institutional sector as part shareholders, we can speed up the building of new offshore wind parks."

However, Eldrup said the company is unsure whether it will bid in the upcoming French offshore wind tender round, which is intended to deliver 6GW of renewable energy capacity over the next decade.

"We're looking into the game in France but the tender hasn't been launched yet, so it will also depend on timing," he said.

Under the terms of the sale annouced yesterday, PensionDanmark will acquire a 30 per cent interest, while PKA will acquire 20 per cent, both taking ownership of their stakes from April 2014, once the project is completed.

Eldrup said the total capital investment on the project remains 10bn DKK, as originally stated when Dong won the rights to construct Anholt.

However, the pension funds will pay a premium to aquire half the project because Dong will shoulder the risk of a fine from the Danish government if it fails to finish building the wind farm by the planned completion date of 2013.