Asset AllocationJune 20, 2024

NBIM Takes Stake in UK-Based Offshore Wind Project

The 37.5% stake in ’Race Bank’ is worth $419 million.

Reported by Matt Toledo

The sovereign wealth fund of Norway is expanding its portfolio of renewable energy infrastructure, purchasing a 37.5% stake in an operational offshore wind farm located in the U.K., Norges Bank Investment Management has announced. The stake is worth 330 million pounds ($419 million).

The project, named Race Bank, started commercial operations in the U.K. with 91 wind turbines, which collectively generate 573 megawatts of capacity and is enough to power 510,000 homes in the U.K. annually, according to the fund’s announcement.

NBIM purchased its stake in the project from Macquarie Asset Management and Spring Infrastructure Capital Co., which held a 25% and 12.5% stake. Respectively, through their European Infrastructure Fund 5 and Spring Infrastructure 1 Investment Limited Partnership.

Arjun Infrastructure Partners will remain a co-investor with a 12.5% stake in the project. Energy company Ørsted will maintain its 50% stake in the project. The valuation of Race Bank is approximately 2.599 billion pounds ($3.30 billion) as of the announcement of NBIM’s investment in the project.

NBIM has 17.733 trillion kroner in assets under management, or roughly $1.633 trillion. The fund made its first renewable energy infrastructure investment in 2021, acquiring a 50% interest in Ørsted-owned and Netherlands-based offshore wind farm Borssele 1 & 2.

Other wind infrastructure projects owned by NBIM include a 49% stake in a portfolio of solar plant and onshore wind projects located in Spain, as well as a 16.6% in German offshore wind project He Dreiht. These investments are a part of NBIM’s renewable energy infrastructure management fund, which invests in renewable energy infrastructure across Europe and North America.

According to NBIM, the agreement to purchase the stake in the Race Bank project was signed on April 9 and completed on June 14.

Institutional investors have poured billions into offshore wind projects in recent years. Canadian fund CPP Investments recently consolidated its holdings of offshore wind projects through its subsidiary Reventus Power. According to a report from the Global Wind Energy Council, investment in global offshore wind reached $76.7 billion in 2023, citing data from BloombergNEF.