RWE Sells 85% of North Sea Wind Farms in ‘Milestone’ Deal

Sep 04, 2014 12:14 pm ET

(Updates with RWE, Northland shares in last paragraph.)

Sept. 4 (Bloomberg) -- RWE AG will sell 85 percent of offshore wind projects Nordsee One, Two and Three to Northland Power Inc.

RWE’s Innogy renewables unit agreed to sell the stake in the advanced 332-megawatt Nordsee One project, as well as the “early stage” Nordsee Two and Three projects with a combined capacity of about 670 megawatts that “will be developed over the next decade,” the companies said today in a statement without giving a price. The projects are 40 kilometers (25 miles) north of Germany’s Juist Island.

“Today’s agreement marks the first important milestone on the way to realize the Nordsee One offshore wind project,” Hans Buenting, Innogy chief executive officer, said in the statement.

The companies seek to reach a final investment accord, and closing, for Nordsee One, estimated to cost 1.2 billion euros ($1.6 billion), in the first half of 2015. RWE had planned to make a final investment decision on the project at the start of 2014 before postponing it to later in the year. The company said in January it sought to retain 25 percent.

The companies expect to start construction offshore in 2016 and commercial operation by the end of 2017.

RWE, Germany’s largest power generator, will reduce capital spending for renewables from 1 billion euros in 2013 to the same total sum in the three years through 2016. It cut the 2014 operating profit forecast of the Innogy unit last month.

RWE rose 1.6 percent to 31.255 euros in Frankfurt, its highest close since July 29. Northland was little changed at C$18.07 by 11:56 a.m. in Toronto trading.