RWE has agreed to sell a 50 percent stake in its Norfolk Vanguard East and West offshore wind projects to global investor KKR, marking one of the largest recent transactions in the UK renewable energy sector. The deal follows RWE’s success in Britain’s milestone offshore wind auction and underscores strong investor appetite for large scale clean energy assets.
RWE did not disclose financial details of the joint venture, which is expected to close in the summer. However, sources familiar with the matter said KKR paid around 1.8 billion dollars for the stake. Both companies said they would assess opportunities to extend their collaboration to additional projects in the future.
Under the agreement, RWE and KKR will jointly develop, build and operate the two offshore wind farms, using a “farming down” model that allows developers and financial partners to share the high capital costs of offshore wind projects. Such projects typically require investments starting at around 1 billion euros.
KKR said the Norfolk Vanguard East and West projects will require more than 15 billion dollars in total development and capital expenditure to become operational by 2029 and 2030, respectively. Vincent Policard, co head of European infrastructure at KKR, said the investment reflects KKR’s conviction in the long term importance of UK renewables and the central role offshore wind will play in Britain’s energy transition.
The announcement lifted investor confidence in RWE, with shares in Germany’s largest utility rising as much as 3.5 percent to their highest level in nearly 15 years.
Located around 50 to 80 miles off the British coast, the Norfolk Vanguard East and West projects were awarded UK government contracts covering a combined capacity of 3.1 gigawatts. Once operational, the wind farms are expected to generate enough electricity to power around three million homes.
The transaction follows RWE’s strategy of recycling capital to fund new growth. Last year, the company sold a 49 percent stake in two offshore wind farms in Denmark and Germany to Norway’s sovereign wealth fund for 1.4 billion euros.
KKR said its global infrastructure platform has committed more than 31 billion dollars to energy transition and renewable infrastructure projects worldwide since 2011, including investments in German renewable developer Encavis. The RWE partnership further strengthens KKR’s presence in the European offshore wind market.
