SSE Sells Half UK Wind Farm To Npower For GBP308M

(Adds RWE Innogy comment.) By James Herron
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--Scottish and Southern Energy PLC (SSE.LN) Monday said it has agreed to sell half of the Greater Gabbard offshore wind farm it plans to build in the Thames Estuary to Npower Renewables, a U.K. subsidiary of German utility RWE AG (RWE.XE), for GBP308 million.
RWE's payment will give it 50% of the equity in the wind farm holding company and reimburse SSE for half the costs incurred in the development of the project so far.
Once completed, the project will have a capacity of 500 megawatts, making it the world's largest offshore wind farm.
Ian Marchant, Chief Executive of SSE, said: "Greater Gabbard is a major development in every sense, and its significance is underlined by RWE Innogy's investment in it. Our priority is to make sure construction work proceeds in an efficient and timely manner, so that it can begin to play its important part in meeting the U.K.'s energy needs as soon as possible."
Kevin McCullough, Chief Operating Officer of RWE Innogy, of which Npower renewables is a subsidiary, said: "This acquisition is a perfect addition to our existing offshore wind portfolio, and is also an important step towards reaching RWE Innogy??s goal of increasing its renewables production capacity to 4,500MW by 2012."
A London-based equity analyst said the sale was to be expected.
"SSE was always going to bring in a partner," after buying Fluor's (FLR) 50% stake in May, he said. SSE is in a closed period now ahead of its earnings, so it's difficult to know if they got a good price, he added.
Onshore work on the construction of the wind farm is under way and offshore work is on track to begin in the middle of 2009. The project will be commissioned in two phases, with the first phase generating electricity from 2010 and the entire construction scheduled to be completed in 2011. The full development is expected to cost GBP1.3 billion. SSE will operate the project.
SSE shares were down 0.9% or 11 pence, at 1203p at 1419 GMT Monday.
-By James Herron, Dow Jones Newswires; +44 (0)20 7842 9317; james.herron@dowjones.com