Eversource Energy, a US energy provider based in Boston, Massachussetts and Hartford, Connecticut, has agreed to sell its 50% stakes in South Fork Wind and Revolution Wind to Global Infrastructure Partners (GIP) for US$1.1 billion.
The 704-megawatt Revolution Wind project, offshore Rhode Island, is scheduled to start commercial operation in 2025.
The 132MW South Fork Wind project, offshore Long Island, will be fully operational prior to the close of the transaction with GIP, which is expected to occur in mid-2024.
Goldman Sachs acted as financial adviser to Eversource, while Ropes & Gray acted as legal counsel. Milbank advised the lenders to GIP.
Cost-sharing obligations
Eversource will retain certain cost-sharing obligations for the construction of Revolution Wind. The company will share equally with GIP funding obligations for up to US$240 million of incremental capital expenditure overruns incurred, after which GIP’s obligations for any additional capital expenditure overruns would be borne by Eversource, consistent with the existing joint-venture terms.
Eversource does not expect any material differences in the cost of construction for South Fork Wind relative to the base forecast. The company’s financial ties with South Fork Wind, other than as a tax equity partner, are expected to be largely resolved at closing. Eversource will maintain its tax equity investment.
Orsted’s 50% ownership interests in the two projects are not affected by the transaction.
Eversource is expected to enter into a separate construction management agreement as a contractor to Revolution Wind, to complete the onshore work that is currently underway.
On January 24, Eversource announced that it had reached agreement to sell its 50% interest in the 924MW Sunrise Wind project, offshore Connecticut, to Orsted, contingent on the successful award of a renewable energy credits agreement request for proposal, and other conditions.
Long-term offtake deals
“We are pleased to announce our acquisition of a 50% stake in two significant offshore wind projects from Eversource,” says GIP chairman and chief executive officer Bayo Ogunlesi.
“This acquisition marks our fourth strategic joint venture with Orsted, further solidifying our strong partnership with leading industry players. The South Fork Wind and Revolution Wind projects benefit from long-term offtake agreements and play a pivotal role in addressing the increasing demand for clean electricity.”
In May 2023, Eversource announced that it would sell its 50% interest in approximately 175,000 of developable but uncommitted offshore acres to Orsted for US$625 million. The transaction closed in September.
Eversource operates New England’s largest energy delivery system, and serves approximately 4.4 million electric, natural gas and water utility customers in Connecticut, Massachusetts and New Hampshire.
