The goal: green electricity for the European production sites of BASF
Deutsche Bank advises BASF on its most significant investment in renewable energy. By purchasing the world's largest offshore wind farm off the west coast of the Netherlands, BASF is securing green electricity for its European production sites. For BASF, the world's largest chemical producer, this is an important step on the way to climate neutrality by 2050.
The Hollandse Kust Zuid (HKZ) wind farm, which is currently under construction, is located in the North Sea, around 53 kilometers off the west coast of the Netherlands. Around 140 wind turbines produce green electricity that corresponds to the annual consumption of over two million households.
This is the first time that a company has acquired a major stake in a wind farm to secure its energy needs. Looking at the macroeconomic environment, this strategy is of great importance for companies to promote fossil fuel independence and ultimately to enable the green transition of our economy," says Johannes Hermanns , from the investment banking team at Deutsche Bank.
"With the cost per megawatt hour falling, we expect offshore wind energy to play a larger role in the energy mix in Europe and globally. As investors in green energy, companies and energy consumers will play a key role in enabling this transition process," adds Michael Volkermann , head of the project finance team at Deutsche Bank's corporate bank.
Key points of the transaction:
On June 24, 2021, BASF acquired a 49.5 percent stake in Vattenfall's 1.5 GW offshore wind farm project, which is under construction.
On December 6, 2021, BASF announced that it had reached an agreement to sell 51 percent of its stake in Allianz Capital Partners (ACP). Upon completion of this transaction, ACP will hold a 25.2 percent stake in HKZ. BASF has made a commitment to ACP to purchase a large part of the electricity generated in the wind farm.
The role of Deutsche Bank
Deutsche Bank was the sole financial advisor to BASF on the 1.6 billion takeover of Vattenfall. The bank advised BASF on the subsequent sale of 51 percent of the shares in ACP and also on the project financing.
Deutsche Bank structured the project financing from scratch and customized it to suit BASF's specific project structure and requirements.