The Diplomat
Iberdrola has signed a strategic agreement with Masdar, the Abu Dhabi Emirate’s renewables group, to sell a 49% minority stake in the company that owns the 476 megawatt (MW) Baltic Eagle offshore wind farm, located in German waters in the Baltic Sea, the energy company said in a statement yesterday.
According to the terms of the transaction, the price to be paid at the closing of the transaction, which will be subject to possible adjustments customary in this type of transaction, will be approximately 375 million euros, which represents an implicit valuation of 100% of the wind farm, once its construction is completed, of approximately 1,630 milion euros in terms of equity value.
Following completion of the transaction, the purchaser will be required to contribute, in proportion to its shareholding in Baltic Eagle, to the construction costs of the wind farm until its completion. Iberdrola, which thus closes a deal with Masdar that brings a partner into its projects, as it has already done with others, will control and manage the assets, providing operation and maintenance services and other corporate services, reports Europa Press.
In recent months, Iberdrola has closed several long-term alliances to boost the decarbonisation of the economy, such as the sealing with GIC of a strategic alliance for the expansion of transmission networks in Brazil for 430 million euros. It also agreed with Norges Bank Investment Management to co-invest in 1,265 MW of new renewable capacity in Spain and sold 60% of its business in Mexico, mainly combined cycle gas plants, for 6 billion dollars.
It also continued to make progress in its strategic alliance with Mapfre by incorporating 100 new MW through a joint venture, which already has 450 MW, and signed an alliance with Energy Infrastructure Partners to co-invest in the Wikinger offshore wind farm and strengthen its offshore wind portfolio.
This new agreement was signed in Madrid by Iberdrola Chairman Ignacio Sánchez Galán and Masdar CEO Mohamed Jameel Al Ramahi as part of a broader commitment between the two clean energy powerhouses.
Both parties consider this to be “a transaction of strategic importance and a key milestone that strengthens a partnership that will allow us to explore further renewable energy investment opportunities across technologies and regions”, the utility said.
Baltic Eagle will have 50 wind turbines of 9.53 MW of unit power on monopiles, for an annual production of 1.9 terawatt hours (TWh), enough to sustainably meet the demand of 475,000 homes and avoid the emission of 800,000 tonnes of CO2 into the atmosphere each year.
This wind farm, which is scheduled to come into operation at the end of 2024, has a minimum regulated tariff of 64.6 euros per megawatt hour (MWh) for the first 20 years. In addition, it has already sold 100% of its production under long-term contracts.
Sultan Al Jaber, Minister of Industry and Advanced Technology of the United Arab Emirates (UAE), Chairman of Masdar and President-designate of COP28, stressed that this “historic agreement between Masdar and Iberdrola will take advantage of Germany’s abundant wind power in the Baltic Sea and bring electricity to nearly half a million homes while reducing emissions”. “As the UAE prepares to host COP28, partnerships like this show how we can curb emissions without slowing progress,” he added.
Galán said that “delivering the clean energy the world needs requires companies with vision and commitment that are willing to invest heavily in new infrastructure”.
“Masdar brings all of this to Baltic Eagle. This major project will help boost green energy security in Europe, reduce emissions from households and businesses and support thousands of high-skilled jobs. Building long-term partnerships with sustainable leaders like Masdar will help Iberdrola continue to lead the global energy transition,” he added.
Iberdrola has 3,000 MW of offshore wind projects under construction or secured, with zero costs on the seabed thanks to the group’s pioneering position. In early July this year, Iberdrola connected the Saint-Brieuc offshore wind farm in France to the grid. It is the first large-scale offshore wind project to be delivered in the Brittany region.
In addition, the Vineyard Wind offshore wind project in the United States is scheduled to come online in the last quarter of 2023. The Baltic Eagle wind farm in Germany will be operational in 2024, and East Anglia 3 in the UK and Windanker in Germany will start production in 2026. These projects will add to Iberdrola’s existing portfolio of 1,258 MW of operational offshore wind projects, including West of Duddon Sands in the Irish Sea, Wikinger in the German Baltic Sea and East Anglia One in the southern North Sea.
