Stake in giant wind farm for sale

● Swedish utility Vattenfall plans to sell a stake in what will be one of the largest offshore wind farms in the world.

The company said it has hired a financial adviser to sell part of the 1,500MW Hollandse Kust Zuid wind farm development off the coast of the Netherlands.

Offshore wind farms, with their multibillion-dollar price tags and capacity to power millions of homes, have become a highly sought-after asset for investment funds and energy majors looking to decarbonise their portfolios.

“One cornerstone of Vattenfall’s growth strategy is to look for potential investors to balance the huge investment costs of our future assets,” a spokesperson said. “We are just at the beginning of the process to attract potential partners/co-investors.”

Vattenfall said it was too early to comment on the size of the stake. It made a final investment decision on the project in June and plans to begin construction next year to complete the wind farm by 2023.

Investors have traditionally favoured offshore wind farms not just because of their green profile, but also their steady flow of returns guaranteed by government subsidies.

However, Vattenfall’s giant wind farm won’t have government support for the power it eventually sells. That makes the sale something of a test case of market appetite for such giant, unsubsidised projects.

While investment funds may balk at the uncertain returns, it could be an attractive option for oil majors.

Some of Europe’s biggest oil producers have aggressive goals to increase their renewable power production. Already this year, French oil company Total SE bought into a mostly unsubsidised wind farm under construction in the UK and Royal Dutch Shell won an auction to build an unsubsidised Dutch offshore wind farm.