Danish pensions in $1bn wind farm deal

PensionDanmark and PKA have collectively acquired a 50 percent stake in the Anholt offshore wind farm from DONG Energy for DKK6 billion (€805 million; $1.1 billion). PensionDanmark takes a 30 percent stake in the wind farm and PKA 20 percent.

Offshore wind: powering Danish pensions

Anholt will consist of 111 wind turbines, making it Denmark’s largest wind farm, and is expected to start producing power in 2012. It will have a capacity of 400 megawatts. 

The latest deal follows an earlier one struck between DONG Energy and PensionDanmark in September last year. In that case, PensionDanmark acquired from DONG a 50 percent stake in the Nysted offshore wind farm for DKK700 million. At the time, PensionDanmark chief executive Torben Moger Pedersen said he hoped the deal would serve as a template for future partnerships.

Following the latest deal, Pedersen said: “Investments in wind farms make perfect sense from an investment perspective – especially with bond yields at just above 3 per cent and equity markets in the coming years might well be very volatile and driven by imbalances in the global economy and the fact that both Europe and the US is struggling with the effects from the financial crisis.”

“In light of this,” he added, “investments in solar and wind energy are very attractive to a long-term investor [such] as PensionDanmark. These types of investments can generate a return in line with what we expect from the equity market. But the risk and sensitivity to the global business cycle is significantly lower than with equity investments.”

A statement announcing the deal highlighted the fact that 840,000 pension savers were now effectively co-owners of the wind farm.