Hexicon Acquiring Shell’s Stake in 1.1 GW South Korean Floating Wind Project

February 22, 2024, by Adrijana Buljan

Swedish floating wind developer Hexicon and Shell have signed an agreement under which Hexicon will acquire Shell’s 80 per cent stake in the MunmuBaram floating wind project. Once the transaction is closed, Hexicon, which currently holds the remaining 20 per cent stake, will fully own the South Korean project.

Under the agreement, Hexicon will pay the purchase price for the acquisition with a first down payment of USD 5 million (approximately EUR 4.6 million). In addition, the deal includes a profit-sharing arrangement of up to USD 50 million (approx. EUR 46 million) over a three-year period.

Hexicon says the acquisition of full ownership in the MunmuBaram project is enabled through the support of the European clean energy infrastructure fund Glennmont Partners and that the commitment in the agreement falls within the existing framework of Hexicon’s Glennmont loan facility.

The transaction between Shell and Hexicon is subject to regulatory approval and is expected to be completed later this year.

“South Korea continues to be a leading market with good conditions for the development of floating offshore wind. Through this transaction, South Korea remains a core market for Hexicon and strengthens our position as a leading global developer of floating offshore wind,” said Marcus Thor, CEO of Hexicon AB.

MunmuBaram is a floating offshore wind farm proposed to be built in the southeastern region of South Korea, between 65 and 80 kilometres off the coast of Ulsan City.

The offshore wind farm is planned to feature Vestas’s 15 MW wind turbines under a preferred supplier agreement the joint venture signed with the Danish wind turbine manufacturer in 2022. The agreement was signed for 84 wind turbines, making up for a total installed capacity of 1,260 MW. In its press release announcing the acquisition of full project ownership, Hexicon states the project’s installed capacity to be 1,125 MW.

In March 2022, the MunmuBaram joint venture received two Electricity Business Licenses (EBLs) from South Korea’s Ministry of Trade, Industry, and Energy for the project, securing all the EBLs required to develop the floating offshore wind farm fully.

In August last year, MunmuBaram signed a non-binding memorandum of understanding (MoU) with Ulsan GPS, a subsidiary of SK Gas, which is building a LNG·LPG combined cycle power plant in Ulsan with a total power generation capacity of 1,122 MW. Under the MOU, subject to future investment decisions, Ulsan GPS and MunmuBaram will enter a long-term offtake agreement for the electricity produced by the floating offshore wind farm.