Renewable Energy M&A: Abu Dhabi's Masdar set to acquire a stake in 476 MW Baltic Eagle wind farm in Germany

Deal details: According to reports, Masdar signed an exclusivity agreement to acquire up to a 49% stake in the $1.5bn offshore wind project located in the German Baltic Sea. Construction of the project began last year, and commercial operation is expected to commence by the end of 2024. A significant portion of the wind farm's power output has already been contracted to investment-grade companies, including Amazon, Salzgitter Group, Holcim, and Stahl-Holding, through long-term power purchase agreements (PPAs). Notably, the project also attracted interest from other firms such as Green Investment Group and Energy Infrastructure Partners, the latter having previously acquired a 49% stake in Iberdrola's Wikinger offshore wind farm in Germany for $705mn.

Deal rationale: The agreement forms a part of Iberdrola's strategic initiative to divest minority stakes in renewable projects at advanced stages of development, enabling the company to finance its ambitious €47bn, three-year investment plan. This transaction follows Iberdrola's previous sale of a 49% stake in the operational 350 MW Wikinger offshore wind farm in Germany to Energy Infrastructure Partners (EIP) and the recent divestment of a 49% stake in a ~1.3 GW renewable portfolio in Spain to Norges Bank Investment Management (NBIM) for ~€600mn. Iberdrola is actively advancing the sale of various mature assets globally, including the 1.4 GW East Anglia Three offshore wind farm. These divestments will contribute equity capital for Iberdrola's expansion, while helping the utility to avoid tapping the debt market for project-level financing. 

For Masdar, the deal signifies an expansion of its offshore wind portfolio in Europe, adding to existing investments in prominent projects such as the 630 MW London Array, the 402 MW Dudgeon, and the 30 MW Hywind Scotland. The move aligns with Masdar's ambitious plan to significantly increase its gross renewable capacity from 20 GW in 2022 to 100 GW by 2030. By expanding its presence in the European offshore wind sector, Masdar aims to play a pivotal role in driving the transition towards clean and sustainable energy sources.

The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.

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