Eni Buys $544 Million Stake in the Biggest Wind Farm at Sea

(Bloomberg) --

Eni SpA bought a 20% stake in a portion of what will be the world’s largest offshore wind farm off the east coast of the U.K.

The company paid 405 million pounds ($544 million) split between the developers of the project, SSE Plc and Equinor ASA, according to statements from the companies. It’s the latest move from one of Europe’s biggest oil companies to buy a place in the race to build giant wind farms at sea.

This year has seen an increased effort from European energy majors to get into the offshore wind sector that’s been dominated by utilities. The giant wind parks are attractive ways to rapidly build up low-carbon generation portfolios and also leverage decades of experience working at sea.

Just this year France’s Total SE bought into another SSE offshore wind farm in Scotland. BP took a $1.1 billion stake of two development-stage wind farms off the east coast of the U.S. And Royal Dutch Shell Plc won the rights to develop a zero-subsidy project off the coast of the Netherlands.

Eni had also earlier announced that it plans to bid for seabed in the U.K., the first move in the years-long process of building offshore wind farms. Other oil majors are expected to take part in that process or a similar one happening in Scotland.

Eni has a target of 5 gigawatts of installed renewable capacity in its portfolio by 2024.

“For Eni, entering the offshore wind market in northern Europe is a great opportunity to gain further skills in the sector thanks to the collaboration with two of the industry’s leading companies,” Chief Executive Officer Claudio Descalzi said.

SSE and Equinor announced financial close for the project on November 26. Once finished, it will generate enough electricity to supply 5% of U.K. demand.

The deal is expected to complete in early 2021, subject to regulatory and lender approvals. There is no change to the ownership of the third phase of the project, the 1,200-megawatt Dogger Bank C, in which SSE and Equinor each have a 50% stake.

Eni was advised by RBC Capital Markets. SSE was advised by Rothschild and Co. and Linklaters LLP.

SSE increased guidance for earnings per share by 15 pence to between 85-90 pence, it said in a statement.

“This transaction will enable us to fund further low-carbon growth opportunities, helping to deliver governments’ net-zero ambitions and our own target to treble our renewable output by 2030,” Gregor Alexander, finance director at SSE said.

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