Japanese invest in North Sea

On Thursday, a Japanese conglomerate paid £200 million to take a 49% stake in a UK offshore wind farm. The sale marked the first equity investment by an Asian company in this particular area of the European wind energy market.

For Dong Energy, the Danish company responsible for developing the site and selling of almost half its stake, the deal freed up significant capital, while for the industry, the agreement provided an insight into offshore finance in the future.

So does the deal open the door for further Asian investment and should European developers be worried?

With the deal still less than a week old, it’s still far too early to call. However, with the European private equity markets exercising considerable caution, with developers keen to free up future funds and with the Asian markets looking to learn from our experiences in the North Sea, on paper the argument begins to stack up.

What’s going to be interesting to watch of course, is the impact that these sorts of investments begin to have on public policy, government incentives and the much-anticipated new tariff system, under which offshore farms will be rewarded with a fixed price for electricity and by proxy, a guaranteed rate of return.

Whatever the impact, for the consumer, the deal will no doubt go un-noticed. However for industry executive’s, returning fresh from their summer break, the deal could just be what was needed to unlock vital future funds.