Apollo Inks $6.5B Deal for Stake in World's Largest Offshore Wind Farm
The investment in Ørsted's Hornsea 3 project marks a major expansion of Apollo's renewable energy portfolio and its growing role in financing the global energy transition.
Apollo Global Management (NYSE: APO) has committed $6.5 billion to acquire a 50% stake in Ørsted's Hornsea 3, a project set to become the world's largest offshore wind farm. The deal, announced Tuesday, underscores the private equity giant's deepening commitment to energy transition infrastructure and its capacity to deploy massive capital into complex, long-term green assets.
The investment solidifies a joint venture for the 2.9-gigawatt project located off the coast of the UK. When completed, Hornsea 3 will generate enough renewable electricity to power over 3 million homes. For Apollo, a firm with a market capitalization of over $71 billion, the deal represents a significant strategic deployment within its clean energy strategy. Shares of Apollo traded steadily following the announcement, reflecting a market that is increasingly factoring in the firm's strategic pivot toward large-scale infrastructure.
Under the terms of the agreement, Apollo-managed funds will make the payment in stages, covering half of the development and construction costs. Ørsted, the Danish renewable energy leader, will continue to manage the construction and will provide long-term operations and maintenance for the wind farm. This structure allows Ørsted to bring in a major financial partner to de-risk the massive project while retaining operational control, a critical move as the industry grapples with rising costs and supply chain pressures.
This transaction is a cornerstone of Apollo's broader energy transition initiative, which has seen the firm deploy, arrange, or commit approximately $59 billion to related investments since 2022. It follows a series of major acquisitions aimed at building a robust renewable energy portfolio, including the purchase of U.S. hydroelectric platform Eagle Creek Renewable Energy and a stake in TotalEnergies' Texas solar and battery portfolio. Adam Petrie, an Apollo Infrastructure Partner, stated the investment delivers a "scaled and comprehensive solution for infrastructure that will promote energy security and the UK's net zero ambitions," according to a company statement.
For Ørsted, the partnership provides a crucial capital injection, shoring up its balance sheet after a challenging period for the offshore wind sector. The capital-intensive nature of these mega-projects has led many developers to seek equity partners. By selling a stake, Ørsted can recycle capital into future projects without taking on excessive leverage, a strategy that has become essential for funding the global green transition.
Wall Street analysts have maintained a broadly positive outlook on Apollo, with a consensus price target of over $152, suggesting significant upside from its current trading level of around $124. The firm’s aggressive expansion into infrastructure and clean energy is viewed as a key driver for future growth, providing stable, long-duration assets that complement its traditional private equity and credit businesses. Deals like Hornsea 3 are increasingly vital as institutional investors seek exposure to the multi-trillion-dollar energy transition market.
As governments worldwide pursue ambitious climate goals, the role of private capital in funding large-scale renewable projects has never been more critical. Bloomberg reported that the deal highlights a growing trend of developers partnering with financial sponsors to navigate the complex financing landscape. The Apollo-Ørsted venture serves as a powerful model for how private equity can accelerate the development of essential green infrastructure, bridging the gap between ambitious climate targets and the capital required to achieve them.