Deutsche Bank advises BASF on world’s largest offshore wind farm
Deutsche Bank (DB) has successfully advised BASF on a complex M&A and project financing transaction for the acquisition and construction of the world’s largest offshore wind farm, Hollandse Kust Zuid (HKZ).
Once fully operational, Hollandse Kust Zuid will be the largest offshore wind farm in the world with 140 wind turbines and a total installed capacity of 1.5 gigawatts. The project led by Vattenfall is expected to become fully operational in 2023.
For BASF, the world’s largest chemical producer, this is the first major investment in renewable energy and a key step in its transformation toward climate neutrality by 2050. The wind farm will generate green electricity for BASF’s production sites in Europe. HKZ will have a maximum of 140 wind turbines and will produce green electricity equivalent to the annual consumption of more than two million households. Construction has already started on the wind farm, which is located in the North Sea, approximately 53 kilometres off the west coast of the Netherlands.
“This is the first time a corporate has acquired a major stake in a wind farm to secure its energy demand. Given the current macro environment, this strategy is key for corporates to facilitate independence from fossil fuels and ultimately to enable the green transition of our economy,” says Johannes Hermanns, Mergers & Acquisitions DACH at Deutsche Bank’s Investment Bank.
“Given the decreasing cost per MWh we expect that offshore wind will play a larger role in the energy mix in Europe and globally. Corporates as investors and as energy off-takers will be key to enable this transition process,” says Michael Volkermann, head of Project Finance at Deutsche Bank’s Corporate Bank.
Key transaction details
On June 24, 2021, BASF acquired a 49.5% stake in Vattenfall AB’s offshore wind farm project.
On December 6, 2021, BASF announced that it has entered into a definitive agreement to sell 51% of its stake to Allianz Capital Partners (ACP). With this transaction now complete, ACP effectively owns a 25.2% indirect stake in HKZ. As a part of the sale to ACP, BASF committed to purchase a vast majority of the power generated by the wind farm under a long-term corporate power purchase agreement.
Deutsche Bank acted as a sole financial adviser to BASF both on the acquisition from Vattenfall with a total financial engagement for BASF of EUR1.6 billion (USD1.69 billion), the subsequent sale of 51% of its stake to ACP and the project financing.
