Photo taken on September 4, 2023 shows a windmill at the NYSTED offshore wind farm built by Danish Wind Power Giant Orsted between 2002 and 2003 in the Baltic Sea near Gesser, Denmark.
Thomas Trusdahl | AFP | Getty Images
Norwegian oil giant Equinor On Monday, Denmark’s Austrid pledged to support its fresh capital of about $1 billion, supporting the plagued company amid persistent attacks on offshore wind power projects from the Trump administration.
In a show of obvious confidence in the world’s largest offshore wind developer, Equinor expressed his intention to take part in Orsted’s planned 60 billion ($9.4 billion) rights issue, saying it intends to retain 10% ownership of the company.
Equiner said the strategic support for rights issues reflects the confidence in Orsted’s underlying business and offshore wind competitiveness in the future energy mix. The state-backed Norwegian Energy Group is Orsted’s second largest shareholder behind the Danish government.
As part of the move, Equiner said the candidate would be nominated for Austed’s board of directors.
Orsted’s shares rose 3.6% on the news before making profits. The stock, which has been down nearly 90% since 2021, won a fresh record low last month after the Trump administration ordered work at the near-complete Wind Farm.
Equiner’s shares were last seen 0.2% higher on Monday morning.
The companies are navigating challenges related to the offshore wind industry, and say Equiner is closely monitoring US development and intends to continue their dialogue with Orsted.
The wind industry has been the target of President Donald Trump since his first day in office. The latest blow comes Friday when the U.S. Department of Transport cancelled $679 million in federal funds for 12 infrastructure projects supporting offshore wind power generation nationwide.
“The wasted wind projects use resources that could otherwise lead to revitalizing the American maritime industry,” Transport Secretary Sean Duffy said in a statement.
Analysts at RBC Capital Markets said Equinor’s move to support Orsted could be considered the company’s first step, given the potential merger between the two offshore wind portfolios.
“The challenge of fully participating is that the company effectively increases net exposure to two 100%-owned US offshore wind projects, both likely to be removed in the near future, and political support appears to remain uncertain,” an analyst at RBC Capital Markets said in a research note.
“The gradual positive is that, in addition to the maintained shareholding, Equinor has the board’s representative and makes the most of the challenging situation,” they added.
Equinor and Orsted spokesmen did not immediately respond to CNBC’s request for comment.
– CNBC’s Spencer Kimball & Ganeshrao contributed to this report.
