PensionDanmark plugs €389m in offshore grid

The pension will invest via Copenhagen Infrastructure Partners alongside Danish utility TenneT.

PensionDanmark has invested DKK2.9 billion (€389 million; $534 million) in the DolWin3 grid connection, a transmission network for wind power in the North Sea.

The investment will be made via Copenhagen Infrastructure Partners (CIP), a fund manager set up in 2012 with DKK6 billion from PensionDanmark as seed investor. The capital will be channeled through a vehicle separate from CIP’s first fund, even though the fund’s sole limited partner is the Danish pension.

The investment in DolWin3 is a joint venture between CIP and TenneT, one of the five largest grid operators in Europe. TenneT, which is owned by the Dutch state, will finance the largest portion of the construction costs. These are expected to amount to DKK14.2 billion.

The DolWin3 grid connection will transmit electricity to the mainland from a number of wind farms in the German North Sea. The system, which is planned to be completed by 2017, will have a total capacity of 900 megawatts (MW).

The deal further confirms PensionDanmark's interest in UK renewables, following its investments in various clean energy ventures last year.

In December, the institution paid £153 million (€185 million; $255 million) for nearly half of six British wind farms to Falck Renewables, an Italian renewable energy developer. This came after its £160 million investment in the development of a biomass plant in the east of England alongside Burmeister & Wain Scandinavian Contractor, a Danish developer, in August.

Both transactions were made via CIP’s Fund I. They followed the vehicle’s debut deal, a $200 million mezzanine loan to a US offshore wind farm, in late June.