PSP Partners With Sandbrook to Invest in Norwegian Offshore Wind Services Company Hayfram
Canadian pension manager Public Sector Pension Investment Board, is putting $250 million into an investment vehicle that controls Norwegian wind-farm equipment owner Havfram, according to a statement Monday.
PSP is partnering with Sandbrook Capital, a private equity firm focused on renewable energy, which acquired the majority stake in Havfram earlier this year, the statement said. Sandbrook invested $250 million of equity capital into the company to support vessels to service offshore wind turbines.
“We’re excited to partner with Sandbrook and with the Havfram team to support the growth of offshore wind as one of the world’s most scalable sources of clean energy,” Patrick Charbonneau, senior managing director and global head of infrastructure investments at PSP, said in the statement.
Havfram’s valuation couldn’t be learned. Havfram’s Chief Executive Officer Ingrid Due-Gundersen said the doubling of its equity funding only a month after Sanbrook’s initial investment shows rapid progress. The new investors are “are already leveraging their experience and extensive networks to help Havfram become a leading partner to the global offshore wind industry,” Due-Gundersen said.
Sandbrook, with offices in Stamford, Connecticut, and London, was started by former executives of energy focused private equity firm Riverstone Holdings, including Alfredo Marti, Carl Williams and Chris Hunt.
The firm aims to support the growth of companies in sectors including clean power generation and the related supply chain, according to its website.
PSP put out a press release stating Norway-based offshore wind services company
Havfram secures $500M (USD) equity funding from a partnership between
Sandbrook Capital and PSP Investments:
Oslo – December 12th, 2022. Havfram, an offshore wind services company based in Norway, announced that it has secured an additional USD 250 million in equity funding through a partnership between its primary sponsor, Sandbrook Capital, and Canada’s PSP Investments.
The substantial equity funding, in addition to credit financing from commercial banks and export credit agencies, will be used to build a fleet of state-of-the-art offshore wind vessels. These vessels, capable of installing turbines reaching over 300 meters in tip height and foundations of up to 3,000 tonnes at water depths of up to 70 meters, are among the most critically scarce components of the global renewable energy supply chain.
Havfram also confirmed that its first vessel is now under construction, following execution of a shipbuilding contract with CIMC-Raffles. The NG20000X vessel is equipped with a 3,250-ton crane and the latest battery hybrid drive train technology designed to reduce carbon emissions per MW installed by over 70% compared to previous vessel models. The agreement with CIMC-Raffles contemplates the construction of up to four of these advanced vessels.
Even Larsen, CEO of Havfram’s offshore wind construction business, said “I am proud to announce this important milestone for Havfram Wind AS. With this world-class equipment and one of the most experienced teams in the industry, we are certain that we will be able to provide a first-class service to project owners, turbine suppliers and construction partners globally. I’m also excited that our vessels will have some of the lowest emission profiles in the industry, as we have designed them to use latest electric battery and energy recovery systems, as well as numerous other sustainability innovations”.
Commenting on the additional capitalization, Havfram’s CEO Ingrid Due-Gundersen said “Our planet can’t afford delays in the fight against climate change. The doubling of our equity funding only a month after Sandbrook’s initial investment in Havfram is a testament to the fact that rapid progress can in fact be made when we bring together the right engineering and operational capabilities and specialized investors of scale. We’re extremely grateful to Sandbrook and PSP Investments, not just for their trust and financial support, but also for the way they are already leveraging their experience and extensive networks to help Havfram become a leading partner to the global offshore wind industry”.
Patrick Charbonneau, Senior Managing Director and Global Head of Infrastructure Investments at PSP, added “PSP Investments believes the buildout of the offshore wind supply chain to be part of the solution in addressing climate change and the global shift to net zero. The state-of-the-art vessels built by Havfram will enable the construction of the largest offshore wind turbines to date. For this reason, we are excited to partner with Sandbrook and with the Havfram team to support the growth of offshore wind as one of the world’s most scalable sources of clean energy.”
Havfram is a pureplay offshore wind infrastructure company focused on providing transport, installation and development services for the offshore wind sector. The company was spun out of Havfram AS (formerly known as Ocean Installer AS), a global maritime contractor sponsored by HitecVision AS, and is developing a fleet of next-generation turbine installation vessels capable of servicing 20 MW+ offshore wind turbines. The company is headquartered in Oslo, Norway, with a global presence and offices in Stavanger, Perth and Aberdeen. On November [4th], 2022, Havfram announced that Sandbrook Capital had acquired a majority stake in the company and made an equity commitment of up to USD 250 million. HitecVision remains a minority investor in Havfram.
About PSP Investments
The Public Sector Pension Investment Board (PSP Investments) is one of Canada’s largest pension investment managers with $230.5 billion of net assets under management as of March 31, 2022. It manages a diversified global portfolio composed of investments in capital markets, private equity, real estate, infrastructure, natural resources and credit investments. Established in 1999, PSP Investments manages and invests amounts transferred to it by the Government of Canada for the pension plans of the federal Public Service, the Canadian Forces, the Royal Canadian Mounted Police and the Reserve Force. Headquartered in Ottawa, PSP Investments has its principal business office in Montréal and offices in New York, London and Hong Kong. For more information, visit investpsp.com or follow us on Twitter and LinkedIn.
About Sandbrook Capital
Sandbrook Capital is a private investment firm dedicated exclusively to partnering with world class management teams to build great companies that are crucial to transforming the world’s energy infrastructure. The firm was founded by five partners with decades long experience in the renewable energy sector. It is headquartered in Stamford, CT and London, UK.
HitecVision is a leading provider of institutional capital to Europe’s energy industry, helping build successful companies within oil and gas production, renewable energy, and energy infrastructure. HitecVision has been investing in the energy industry for more than three decades, and the firm’s sector expertise and structuring capabilities permits it to build companies that combine capital preservation with equity return upside potential. The firm is headquartered in Stavanger, Norway with offices in Oslo, London and Milan.
Last week, I discussed in detail CPP Investments' joint venture with Ocean Winds, Golden State Wind, and how it won a 2 GW California wind energy lease.
In the United States and especially in Europe and Asia, large offshore wind investments are being made with the goal of achieving net zero targets by 2050 or earlier.
What I find interesting about this deal is PSP's partnership with Sandbrook Capital to invest a total of US$500 million in Norway-based offshore wind services company Havfram is that it isn't investing in offshore wind farms per se, but a service company which helps builds offshore wind turbines.
It's similar to stating you are not investing in oil producers Exxon Mobil (XOM) or Chevron (CVR) but in oil services companies like Schlumberger (SLB), Halliburton (HAL) or Baker Hughes (BKR).
In other words, PSP and Sandbrook aren't betting on the success of a specific offshore wind project but on a company that services them and helps them develop and grow these projects.
Less risk, less return, more stability and this investment will benefit from the secular trend to build out a lot more offshore wind projects which governments all over the world are helping to finance through public-private partnerships.
I would urge my readers to read more about Havram on its website.
I note the following:
With reference to earlier press release, Havfram has divided its Subsea division and Offshore wind division into two separate companies.
Havfram Subsea offers services within the area of marine and subsea construction and operations. We have a proven track record in successfully delivering large complex subsea projects in challenging environments.
We are rapidly expanding our operations and organisation globally and we will be a key service provider for subsea construction in the future offshore energy market. A market which also includes foundation including mooring systems and cable installation for the offshore wind segment.
Havfram Wind offers offshore wind turbine installation for the rapidly growing global offshore wind market. We have expanded our organisation with a number of in-depth offshore wind specialists with experience from installation of WTG’s, and the company will, as such, have substantial competence and experience for efficient and safe offshore wind installation works.
Havfram Wind is developing a highly advanced jack up wind turbine installation vessel for future generation turbines in close cooperation with Vard, a well-recognised Norwegian ship designer and shipyard.
Kontiki Winds’s ambition is to become a global consulting house for the project development of offshore wind parks.
Combined with the offerings of the other business areas, Kontiki Winds offers offshore wind solutions throughout the value chain from development and concept studies, FEED engineering to installations of wind turbines and associated subsea work.
Patrick Charbonneau, Senior Managing Director and Global Head of
Infrastructure Investments at PSP, states it well in the press release:
“PSP Investments believes the buildout of the offshore wind supply chain to be part of the solution in addressing climate change and the global shift to net zero. The state-of-the-art vessels built by Havfram will enable the construction of the largest offshore wind turbines to date. For this reason, we are excited to partner with Sandbrook and with the Havfram team to support the growth of offshore wind as one of the world’s most scalable sources of clean energy.”
Moreover, PSP has the right strategic partner on this deal, Sandbrook Capital:
Sandbrook Capital is a private investment firm determined to combine consistent financial returns and real climate impact. Together with likeminded entrepreneurs, we build companies crucial to transforming the world’s energy infrastructure.
- $4 billion Equity invested in renewable power and supply chain
- 9 world-class companies built over the last 14 years
- 11 GW over 120 projects generation capacity owned or developed
On November 7th, Havfram announced
that Sandbrook Capital acquired a majority stake in the company and
committed $250 million to fund its future growth:
Havfram, an offshore wind services company based in Norway, announced that it has received a transformative investment from Sandbrook Capital, a private investment firm dedicated to building climate infrastructure companies. As part of the transaction, Sandbrook has committed USD 250 million (NOK 2.65 billion) of equity capital to Havfram. The new capital, which will result in Havfram being one of the best capitalized companies in the sector, will be used to build a fleet of state-of-the-art vessels to service of the growing need for installation of offshore wind turbines and foundations (“WTIVs”), and to further Havfram’s broader strategy to become the leading provider of services to the offshore wind industry. As part of the transaction, Havfram’s subsea activities will be separated into an independent company which will be wholly owned by Norwegian private investment firm HitecVision, who will also remain as a minority shareholder in Havfram.
Globally, ex-China, governments are targeting installation of 250 GW of offshore wind capacity by 2030, representing 24 GW of annual installation activity. To allow for that pace of growth, the industry requires significant investment in the global supply chain, and in particular, in next-generation WTIVs capable of installing very large turbines at heights of over 150 meters under adverse weather conditions. Havfram’s vessels are being designed to support the adoption of offshore wind at scale, while significantly reducing the carbon footprint of installation activities, in an effort to expand access to low-cost clean energy resources.
Led by CEO Ingrid Due-Gundersen, Havfram’s management team has decades of experience in the maritime industry. Havfram Wind, the company’s offshore wind construction division, is led by CEO Even Larsen, who previously built Fred Olsen Wind Carrier into a leader in the offshore wind installation industry. The company’s strategic offshore wind development division is led by Emilie Reeve. Ingrid, Even and Emilie lead a deep team of offshore wind experts, some of whom were responsible for, or involved in, the installation of more than 15% of all offshore wind turbines globally outside China between 2013 and 2020. Havfram’s Board of Directors will be chaired by Andreas Nauen, who previously served as CEO of Siemens Gamesa, one of the largest wind turbine manufacturers in the world.
Commenting on Sandbrook’s investment, Havfram’s CEO Ingrid Due-Gundersen said “We are excited about the opportunity to build a world-class offshore wind business and unlock a key bottleneck in the development of new clean power generation. Sandbrook’s principals are among the most experienced investors in global renewable energy, and in offshore wind installation in particular. Their capital and expertise, combined with the strong operational track record of our team, will be hugely advantageous to our strategic goal of becoming the leading player in supporting the growth of the offshore wind industry globally.”
Alfredo Marti, co-founder and partner of Sandbrook Capital, said “We have had a long-held thesis that large-scale growth in offshore wind is a fundamental step on the path to increasing the penetration of clean electricity globally. Critical to that growth is the creation of a strong supply chain. By partnering with Havfram’s vastly experienced team, we believe we are ideally placed to advance that goal and we look forward to helping them build a great company.”
Tor Espedal, Senior Partner of HitecVision, commented “We are very pleased to have completed this important step in the strategic transformation of Havfram. With the new capital injection from Sandbrook and under the leadership of Ingrid, Even and Emilie, Havfram is poised to become the leading player in the global offshore wind supply chain that we set out to build three years ago.”
After reading this, you understand why PSP Investments followed Sandbrook and invested US$250 million to help Havram grow its operations and become a leading player in the global offshore wind supply chain.
Below, on 14 September 2021, Fred. Olsen Wind Carrier's installation vessel Blue Tern installed the last of 100 turbines on Moray East offshore wind farm well ahead of schedule. Moray East is Scotland's largest offshore windfarm to date with 100 V164-9.5 turbines. Bold Tern installed the first turbines on Moray East in January 2021 but was later replaced by Blue Tern to undergo a scheduled crane upgrade. A carefully planned vessel substitution was successfully carried out in May where Blue Tern was delivered fully loaded on the Moray East site. The overlap helped to improve the project schedule.