Perth-based renewable power and networks giant SSE confirmed it has agreed to sell a 10% stake in Dogger Bank C to Eni for an equity consideration of £70 million.
Dogger Bank will be the world’s largest offshore wind farm when completed and remains on track, including reaching financial close by the end of 2021 for the 1.2GW Dogger Bank C phase which is currently jointly owned 50-50 by SSE and Equinor.
Equinor has also sold a 10% stake to Eni as part of the transaction and once complete the new overall shareholding in Dogger Bank C will be: SSE (40%), Equinor (40%) and Eni (20%).
The transaction is expected to complete by Q1 2022 subject to regulatory approvals and customary purchase price adjustments.
Due to its size and scale, Dogger Bank is being built in three consecutive phases.
“SSE Renewables will continue to lead on the development and construction of Dogger Bank Wind Farm, and Equinor will operate the asset on completion,” said SSE.
“SSE intends to use the proceeds to support the delivery of its net zero-orientated strategy and will set out further details on its capital expenditure plans at its half-year results update on 17 November.
“SSE’s strategy is to create value for shareholders and society in a sustainable way by developing, building, operating, and investing in the electricity infrastructure and businesses needed in the transition to net zero.
“SSE typically sells down stakes to retain 30-40% equity in an offshore wind project for multiple reasons.
“It enables partners to bring their specific capabilities to bear at the optimal point in the project lifecycle for their contribution and risk appetite, while facilitating capital recycling into low-carbon electricity asset growth options and securing developer premiums to realise early value.
“It also reduces the overall risk exposure on large-scale projects and avoids a large increase in net debt that is not earning.”
SSE finance director Gregor Alexander said: “SSE welcomes Eni as an industrial partner to the Dogger Bank C project.
“The sale of a stake in Dogger Bank C to Eni represents good value for shareholders and will enable us to continue to recycle capital into creating more low-carbon electricity assets.
“Together with our partners we are building the world’s largest offshore wind farm, creating value and tackling climate change.
“As the UK and Ireland’s clean energy champion we see significant opportunities to drive further growth in the transition to net zero and partnering in this way will help us to realise this potential.
“It is further testament to the ability of the SSE group to capitalise on the opportunities ahead.”