U.S. utility Dominion Energy (DN) said Thursday it will give Stonepeak a 50% non-controlling interest in its offshore wind farm off the coast of Virginia to help finance the construction of the project worth about $10 billion.
Dominion said it would retain full control of the construction and operation of the project, with Stonepeak paying half of the construction costs.
The deal is expected to close by the end of 2024, and Dominion will receive about $3 billion, equivalent to half of the cost of construction.
The project has an installed capacity of approximately 2,600 megawatts (MW) and consists of 176 turbines, each designed to produce 147 MW located about 27 miles (43.) off the coast of Virginia Beach5 km) and is expected to be the largest offshore wind farm in the United States.
The deal comes against the backdrop of a slowdown in offshore wind project development in 2023 due to rising inflation, rising interest rates, and soaring costs due to chain issues.
Dominion said last year that the roughly $10 billion project is within budget and is expected to be completed by the end of 2026, with the second phase of construction set to begin this year.
In addition, the company also reported a weaker-than-expected fourth-quarter profit due to higher interest expenses and weaker demand for electricity in the company's main service areas.
The company's share price was in pre-market trading** 18%, to 45$45.
According to LSEG, the Richmond, Virginia-based company posted adjusted profit of 29 cents per share, below the average analyst estimate of 38 cents.
The company also said it will conclude its operational business review, which was launched in November 2022, and is scheduled for an investor meeting on March 1.
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