Gulf Energy invests in Germany's wind farm, eyes expansion

08, Jul. 2020

Image by enriquelopezgarre from Pixabay
Image by enriquelopezgarre from Pixabay

BANGKOK, NNA - Thailand’s major energy producer Gulf Energy Development Public Co. (Gulf) has signed a deal to make its first investment in an offshore wind power plant in Germany.

Gulf International Holding Pte. Ltd. (GIH), the company's subsidiary, is buying a 100 percent stake in Borkum Riffgrund 2 Investor Holding GmbH, Frankfurt am Main, Germany (BKR2 Holding) from an affiliate of Global Infrastructure Partners.

GIH would be paying around 19.21 billion baht to 19.57 billion baht ($614 million to $625 million) to GIP III Lighthouse Luxco S.à.r.l., depending on closing adjustments under the share purchase agreement.

BKR2 Holding currently owns 50 percent of Borkum Riffgrund 2 Offshore Wind Farm GmbH & Co. oHG (BKR2 Project). With an installed capacity of 464,800 kilowatts, the Borkum plant is located in the German North Sea, northwest of the country.

Denmark’s largest energy company Orsted A/S holds the other 50 percent.

The acquisition would enhance Gulf'’s renewable energy businesses as it expands globally with a sharper competitive edge, it said. in a statement.

The wind farm has been operating since April 2019 under power purchase and operation agreements with Orsted for a period of 20 years. This offers Gulf a "long-term revenue stability", the company said in a filing to the Stock Exchange of Thailand on Tuesday.

In addition, Gulf "will be able to immediately recognize revenue and profit, resulting in a significant growth of the company's revenue and profit base."

The plant is expected to generate an annual revenue of 6 billion baht, Gulf told NNA.

The investment would allow Gulf to create a strategic partnership with Orsted to facilitate more collaborations in wind energy. Gulf is already eyeing opportunities in more renewable projects in Europe, it told NNA.

After the full transaction is completed in the second half of the year, Gulf will jointly run the farm with Orsted’s subsidiary, Orsted Windpower A/S.

A global leader in offshore wind power, Orsted manages capacities amounting to 6.8 million kw of offshore wind installed globally with another 3.1 million kw being planned towards 2022 in various countries such as Britain, Germany, Denmark and the United States.

Currently, Gulf operates 28 power projects in Thailand and overseas. More than 20 are gas-fired, while six are solar and one is biomass. Five projects are under development, including one offshore wind project in Vietnam.

Wind projects are on track to contribute 5 percent to Gulf's total revenue by 2021, the company told NNA.