FRANKFURT, Jan 14 (Reuters) - RWE said on Wednesday it agreed to sell a 50% stake in its Norfolk Vanguard West and East offshore wind projects to KKR, after the German utility emerged as one of the
RWE and KKR Join Forces for $15 Billion UK Offshore Wind Initiative
RWE and KKR's Strategic Partnership
By Christoph Steitz
Investment Details and Project Scope
FRANKFURT, Jan 14 (Reuters) - RWE said on Wednesday it agreed to sell a 50% stake in its Norfolk Vanguard East and West offshore wind projects to investor KKR, after the German utility emerged as one of the winners in a milestone British renewables auction.
Market Reaction and Share Performance
No financial details were disclosed for the joint venture deal, which is expected to close in the summer, but RWE said both parties would "assess opportunities to extend their collaboration to additional projects".
Future Prospects for UK Renewables
KKR, in a separate statement, said the two wind farms required more than $15 billion in total development and capital spending to make them operational by 2029 and 2030, respectively.
"This investment underscores our conviction in the long-term importance of UK renewables and the central role offshore wind will play in advancing the country's energy transition," Vincent Policard, co-head of European infrastructure at KKR, said.
RWE SHARES HIT 15-YEAR HIGH
RWE and KKR will jointly develop, build and operate the wind farms, a model referred to as farming down that enables both project developers and financiers to split the bill for large offshore projects, which usually start at 1 billion euros ($1.2 billion).
Shares in RWE, Germany's biggest utility, rose as much as 3.5% on the news to their highest level in nearly 15 years.
RWE's Norfolk Vanguard East and West projects, located 50-80 miles off the British coast, were awarded contracts by Britain, covering 3.1 gigawatts, and will be able to power around three million homes once operational.
The deal follows RWE's sale last year of a 49% stake in two offshore wind farms in Denmark and Germany to Norway's sovereign wealth fund for 1.4 billion euros.
KKR said its infrastructure platform had committed more than $31 billion to energy transition and renewables infrastructure worldwide since 2011, including German renewable project developer Encavis.
($1 = 0.8588 euros)
(Reporting by Christoph SteitzEditing by Ludwig Burger and Mark Potter)
