According to Financial Times News, Denmark’s Ørsted has agreed to sell a 50% equity stake in the Hornsea 3 offshore wind farm to Apollo Global Management in a $6.5 billion deal that includes funding half of the project’s remaining construction costs. The 2.9 gigawatt project located 160km off England’s Yorkshire coast is scheduled for completion around the end of 2027 and will become the world’s largest offshore wind farm upon completion. Ørsted CFO Trond Westlie described Apollo as bringing “infrastructure expertise and scaled capital” to the partnership, while Apollo partner Leslie Mapondera emphasized the firm’s role as a “provider of long-term and flexible capital solutions.” This transaction marks Apollo’s latest major European energy infrastructure investment following its $4.5 billion financing for the Hinkley Point C nuclear plant and comes as Ørsted faces significant political and economic challenges in its US operations. This landmark deal signals a fundamental shift in how massive renewable energy projects will be financed moving forward.
The New Capital Reality for Offshore Wind
This transaction reveals that even the world’s largest offshore wind developer cannot shoulder multibillion-dollar projects alone. The scale of Hornsea 3—capable of powering approximately 3 million homes—represents both an engineering marvel and a financial burden that exceeds what traditional utility financing can support. What we’re witnessing is the maturation of offshore wind from a niche renewable technology to a mainstream infrastructure asset class requiring institutional capital participation. Apollo’s record $17 billion in European energy infrastructure deals this year demonstrates that private capital recognizes both the opportunity and the necessity of this shift. The era of single-developer mega-projects appears to be ending, replaced by consortium models more familiar to traditional infrastructure like airports and toll roads.
Political Risk Becomes Investment Calculus
Ørsted’s need for this capital infusion cannot be separated from the political headwinds battering the offshore wind industry, particularly in the United States. The company’s recent struggles with the Trump administration’s opposition to offshore wind—including the stop-work order on Revolution Wind and investor spooking from intervention in Sunrise Wind—highlight how political risk has become a primary consideration for renewable energy financing. This deal effectively transfers some of that political risk to a financial partner with deeper pockets and potentially more patience for regulatory uncertainty. For institutional investors like Apollo, these political challenges create both risk and opportunity—the very volatility that drives traditional energy investors away can create attractive entry points for those with longer time horizons and diversified portfolios.
The Coming Consolidation Wave
This transaction likely heralds a broader consolidation trend in offshore wind development. As project costs escalate due to inflation, supply chain constraints, and rising interest rates, smaller developers will increasingly struggle to secure financing independently. We should expect more partnerships between experienced developers and deep-pocketed financial sponsors, creating a bifurcated market where only the best-capitalized players can compete for the largest projects. This dynamic could accelerate industry consolidation as mid-sized developers become acquisition targets or seek similar financial partnerships. The Ørsted-Apollo model may become the blueprint for how future gigawatt-scale projects get financed, blending operational expertise with institutional capital.
Global Implications Beyond European Waters
While Hornsea 3 sits in UK waters, the implications of this deal extend globally to emerging offshore wind markets in Asia and the Americas. The partnership demonstrates that even in mature markets with established regulatory frameworks and power purchase agreements, the capital requirements have outgrown traditional development models. For newer markets like Japan, South Korea, and the US West Coast, this suggests that successful project development will require similar financial innovation from the outset. The entry of major private equity firms into offshore wind also signals growing confidence in the long-term revenue stability of these assets, despite near-term political and economic challenges. As more financial players follow Apollo’s lead, we may see increased standardization of investment structures and risk allocation that could ultimately lower the cost of capital across the industry.
