The Top 5 Offshore M&A Deals of Q1 2018

In our Finance Quarterly Q2 2018 report, we delved into our deals database to bring you the latest deals from around the world. This includes information on the most significant project M&A, project finance, corporate M&A and power purchase deals between January and March.

Here we have highlighted the five most interesting offshore project M&A deals, which have been reported in the first quarter of 2018.

1) Equinor enters Polish offshore wind market

Norwegian oil firm Equinor (formerly Statoil) entered into an agreement in March to acquire a 50% interest in two early-stage offshore wind projects totalling 1.2GW in the Polish Baltic Sea, from Polenergia. This deal has made Equinor the first foreign company to bet on the success of the Polish offshore wind sector.

Poland is taking steps to install 4GW of offshore capacity by 2030, and state-owned transmission system operator PSE has recently said that this potential capacity could double to 8GW, if the government carries out network upgrades. Polish utility PGE is also looking to develop up-to-2.5GW of offshore wind farms off the Polish coast.

Find out more about offshore wind in Poland here.

2) Mitsubishi buys into Moray East

A subsidiary of Japanese conglomerate Mitsubishi last month bought a 33.4% stake of the 950MW Moray East in UK waters.

Big Japanese corporations have continued to show interest in the European offshore market as slow growth of the sector in their home market, falling costs and Japanese interest rates at a record low of -0.1% have pushed them to look at offshore wind investments in Europe for long-term returns. Mitsubishi is also reportedly looking to invest in the 370MW Norther off the Belgian coast and the 130MW Luchterduinen off the Dutch coast.

Members can read more about the Japanese wind market here.

3) Innogy invests in offshore wind in Ireland

German utility Innogy last month bought a 50% stake of the 600MW Dublin Array offshore scheme in the Irish Sea from local developer Saorgus Energy.

This deal is part of a growing interest that companies have been showing in the Irish offshore wind sector. This includes Belgian developer Parkwind becoming a strategic partner in the planned 330MW Oriel offshore wind farm last October and Element Power acquiring the 750MW North Irish Sea Array from Gaelectric last week.

Since the Irish government excluded offshore wind from renewable energy support schemes in the mid-2000s, the sector has stalled. However, the new Renewable Energy Support Scheme together with the rekindled interest of investors is set to give a new start to the Irish offshore wind market.

Find out more in this blog post by Ionic Consulting’s Ken Boyne.

4) Shell-led consortium sells stake in Borssele 3 & 4

Anglo-Dutch oil giant Shell and its partners Eneco and Mitsubishi sold in January a 45% stake of the planned 731MW Borssele 3 and 4 offshore development to investment manager Partners Group. The consortium, which also includes Van Oord, won backing in December 2016 to develop Borssele 3 and 4 at a strike price of €54.50/MWh in waters off the Netherlands.

The move is set to allow the companies to scale back financial exposure to the wind farms and recycle the cash in new projects. In particular, this fits into the strategy recently announced by Shell, to invest up to $6bn via its new energies arm by 2020 in sectors including wind and solar.

5) ESB enters offshore wind with Galloper deal

Irish state-owned utility ESB bought last month a 12.5% stake in the 353MW Galloper wind farm in UK waters from Macquarie Capital.

This means that ESB has joined Innogy, Macquarie’s Green Investment Group, Siemens Financial Services and Sumitomo Corporation as partner in the £1.5bn project. The deal represents the first investment by ESB into the offshore wind market and is part of its strategy to develop and acquire offshore wind farms totalling up to 1GW off the UK and Ireland by 2020. Galloper was fully commissioned at the end of March.