GLOBAL - PensionDanmark has boosted its infrastructure investments by buying a 50% stake in three US wind farms from German energy supplier E.ON.
The Danish labour-market fund has formed a partnership with E.ON, which will retain a significant stake in the wind farms in Texas and Pennsylvania, and be responsible for day-to-day operations.
A spokesman for PensionDanmark said the fund paid several hundred million US dollars for the stake, but did not disclose the exact price.
Torben Möger Pedersen, chief executive of PensionDanmark, said: "This is our first direct investment in US wind farms and our first partnership with E.ON, one of the world's largest energy companies.
"Investments in wind farms in Denmark and now the US ensure a stable and secure return on a par with shares for many years to come, so our goal is to continue making this type of investment at a fast pace."
The deal is E.ON's first partnership with an institutional investor, and the company said it envisaged entering into more agreements of this kind in the future.
Markus Schenk, CFO at E.ON, said: "The agreement is a significant step in our strategy of creating more value with less capital."
He said the deal showed that the company's energy infrastructure was very attractive for such investors.
"We expect more agreements like this," he said.
PensionDanmark said the investment supplemented the stakes it already holds in Anholt and Nysted Offshore wind farms.
It aims to invest a further DKK12bn (`€1.6bn) in infrastructure over the next five years, it said.
The fund said it was boosting its investment in stable alternatives - such as different types of infrastructure - to 10% of assets due to currently low bond yields and the uncertain economic outlook.
Möger Pedersen said the fund's mission was to create a good, secure return for its members.
"By operating outside quoted markets, we have the opportunity to invest in infrastructure with an expected return on the same level as equities, but with a much lower level of risk and cyclical sensitivity," he said.
Direct investments gave the fund better control of its portfolio and avoided the very high costs typical of traditional capital funds, he said.
The onshore wind parks included in the deal were Papalote Creek I and II in Texas, which have output of 180 MW and 200 MW, respectively, and Stony Creek in Pennsylvania, which produces 53 MW of power.
Some 90% of the power output from the plants is sold at a fixed price under power-purchase agreements, which run for a further 15 years.
The plants supply electricity to around 120,000 homes.
Finalisation of the deal depends on official approval and project financing, PensionDanmark said.