DONG Energy has signed and completed an agreement to divest 50% of the 258 MW UK offshore wind farm project Burbo Bank Extension to Danish pension provider PKA and KIRKBI A/S, parent company of the LEGO Group.
Each investor will obtain a 25% ownership interest in the project. The total purchase price for the investors amounts to approximately GPB 660m (DKK 6.6bn) to be paid in the period 2016-2017.
Burbo Bank Extension will be constructed by DONG Energy with offshore construction works commencing in the spring 2016. The project is expected to be fully commissioned in the first half of 2017.
The windfarm will consist of 32 turbines and will be the first large-scale wind farm to deploy the new MHI Vestas 8.0 MW turbine. When completed Burbo Bank Extension will be able to supply CO2-free power equivalent to the annual electricity consumption of more than 230,000 households.
DONG Energy will provide operation and maintenance services to Burbo Bank Extension under a long-term O&M agreement. Furthermore, DONG Energy will be responsible for the sale and delivery to the market of the part of the production that is generated by PKA and KIRKBI A/S's 50% ownership share.
Henrik Poulsen, CEO of DONG Energy, welcomes the partners:
"I am delighted to welcome the LEGO Group and PKA to a new partnership with DONG Energy. Both of them are already trusted partners in other DONG Energy offshore wind projects and we are proud to be able to build on these existing, successful partnerships. Our partners' commitment to the green transition is well known, and I am pleased that they continue to find our market-leading partnership model attractive."
For the LEGO Group the investment fits well with its high ambition of making a positive impact on the environment. Jørgen Vig Knudstorp, President and Chief Executive Officer of the LEGO Group comments:
"I am proud to announce our investment in the Burbo Bank Extension together with our partners DONG Energy and PKA. This investment is another substantial step for the LEGO Group towards balancing our global energy consumption with renewable energy capacity. Our goal is to fulfil this by 2020 and beyond as we want to make a positive impact on the planet our children will inherit – primarily by providing great play experiences that inspire and develop children, but also through our commitment to the environment."
The investment is made by KIRKBI A/S, which owns 75% of the LEGO Group, and the investment in Burbo Bank Extension is the second major long-term investment within KIRKBI's strategic investment area: Renewables. In 2012, KIRKBI A/S invested in the Borkum Riffgrund 1 offshore wind farm. Both investments support the LEGO Group in balancing its global energy consumption with renewable energy capacity.
Today's announcement marks PKA's fifth investment in an offshore wind farm, of which three are together with DONG Energy. The investment is a part of PKA's ambition to combine stable long-term returns with investments in renewable energy:
Peter Damgaard Jensen, CEO at PKA, said:
"In the spring of 2015 we blacklisted 31 coal companies, which have since lost more than 60% of their value. In the same period, the return on our offshore wind farms has been more than 7%. The first investment in a wind farm by PKA was Anholt offshore wind farm in 2011 together with DONG Energy, and today PKA has invested in five offshore wind farms. Together they will provide renewable energy to about 2 million households. We are proud to be able to provide a good return to the pension savers and at the same time make a positive difference".
The information provided in this announcement does not change DONG Energy's previous financial guidance for the 2016 financial year.