Blackstone to construct €1bn European wind farm

The New York-based private equity firm has made its second significant investment in the renewable energy sector with an agreement to invest in a wind farm off the coast of Germany.

The Blackstone Group is partnering with German energy company Windland Energieerzeugungs to construct a wind farm 80 kilometers off the northern coast of Germany.

The firm said the €1 billion ($1.5 billion) Meerwind project would comprise 80 turbines and had been made possible by the German government’s desire to encourage renewable energy projects. The government introduced an area management plan for future wind farms in the North and East Sea in June. When completed, the facility will supply electricity to 500,000 households, the statement from Blackstone added.

This is the second sizeable investment in the renewable energy sector that Blackstone has made, and its first offshore energy project. One of its portfolio companies, Sithe Global, struck a deal to construct an $870 million hydro electric powerstation in Uganda in December 2007.

Rumours of Blackstone’s involvement in the North Sea wind farm project circulated were first reported on PERE last week, however Blackstone confirmed the details today.

Private equity and real estate firms have been increasingly looking at and moving into the energy sector in recent months. In April, European private equity firm Hg agreed to finance and take an equity stake in Sweden’s largest onshore wind farm development, Havsnas. Starwood Energy, the energy investment unit of Starwood Capital Group, also raised a $433 million energy fund to target investments in the energy and power sectors in North America, while AIG’s private equity infrastructure arm, AIG Highstar, last month agreed to sell its 50 percent stake in power generation company InterGen for $1.1 billion to Indian infrastructure developer GMR Infrastructure. The deal was the largest acquisition of an energy utility company by an Indian firm, according to GMR.