Spanish utility company Iberdrola (IBE.MC) has recently signed an exclusive agreement with Abu Dhabi’s Masdar to collaborate on the development of a significant offshore wind farm in the Baltic Sea, situated in German waters.

Project Details and Strategy

The offshore wind farm, known as Baltic Eagle, will boast an impressive capacity of 476 megawatts (MW). It is set to be constructed off the northeastern coast of Germany and will be equipped with 50 wind turbines. This venture aligns with Iberdrola’s overarching strategy, which involves divesting advanced renewable projects to raise funds and support its extensive 47 billion euro investment plan.

Masdar’s Potential Stake

As part of this collaboration, Masdar, a renowned renewable energy company owned by the United Arab Emirates’ sovereign wealth fund Mubadala, may secure a significant stake in the Baltic Eagle project. Reports suggest that Masdar could potentially acquire up to 49% ownership in the venture, highlighting the keen interest of international investors in Iberdrola’s renewable initiatives.

Project Valuation

The Baltic Eagle offshore wind farm is estimated to be valued at approximately 1.4 billion euros ($1.52 billion), making it a substantial investment opportunity in the renewable energy sector.

Iberdrola’s Strategic Partnerships

This year, Iberdrola has actively pursued collaborations with prominent sovereign wealth funds, marking a notable trend in their business approach. Apart from the agreement with Masdar, the company has also entered into significant deals with Norway’s Norges Bank Investment Management (NBIM) and Singapore’s GIC, further solidifying its commitment to sustainable and environmentally responsible projects.

Competing Candidates for Stake Ownership

The partnership with Masdar follows Iberdrola’s consideration of multiple potential candidates for a stake in the Baltic Eagle project. Swiss fund EIP and Australian asset manager Macquarie’s green investment arm GIG were also among the top contenders vying for involvement in this pioneering renewable energy venture.

Iberdrola’s Official Response

Although the Spanish utility company has not provided an official comment on the reported collaboration with Masdar, the deal signifies another significant step towards the realization of Iberdrola’s ambitious renewable energy investment plan.