Denmark Invests $4.7 Billion in Orsted Amid US Market Challenges

Denmark is committing to invest $4.68 billion in Orsted, a wind-farm developer, to support the country's energy security and clean-energy transition. The investment represents Denmark's share of a $9.36 billion rights issue launched by Orsted amid challenging US market conditions and regulatory uncertainty. Orsted has faced supply-chain bottlenecks, higher interest rates, and opposition to wind energy under the Trump administration.

Denmark has committed to investing €4.68 billion in Ørsted, a leading wind-farm developer, to bolster the country's energy security and accelerate its clean-energy transition. This investment represents Denmark's share of a €9.36 billion rights issue launched by Ørsted to shore up its financial position amid challenging US market conditions and regulatory uncertainty [1].

Ørsted has faced significant hurdles in recent years, including supply-chain bottlenecks, higher interest rates, and opposition to wind energy under the Trump administration. The company has been navigating a complex landscape of policy shifts, supply chain disruptions, and financial pressures in the renewable energy sector.

The rights issue, worth nearly half of Ørsted's market value, seeks to provide financial robustness for the company. Ørsted's CEO, Rasmus Errboe, stated that the company is in an extraordinary situation with the adverse market development in the US on top of past macroeconomic and supply chain challenges [1].

The Danish state, which owns 50.1% of the company, has agreed to subscribe to a similar portion of the share issue, maintaining its majority stake. Any shares not subscribed for by existing shareholders or other investors will be fully underwritten by Morgan Stanley & Co International to ensure the rights issue's completion [1].

Ørsted has also decided to discontinue the sale of its US project, Sunrise Wind, due to uncertainty in the US market. The company will, however, continue with planned divestments of stakes in its Changhua 2 offshore wind farm in Taiwan and Hornsea 3 in Britain. Additionally, it has started a process of selling its European onshore wind business, which is expected to raise more than €35 billion [1].

Proceeds from the rights issue will strengthen Ørsted's capital structure and help it develop the 8.1 gigawatts of offshore wind projects currently under construction by 2027. Ørsted's earnings before interest, tax, depreciation, and amortization (EBITDA) rose 9% year-on-year to €13.9 billion in the first half of 2025, maintaining full-year guidance for an adjusted EBITDA of €25 billion-€28 billion and gross investment guidance of €50 billion-€54 billion [1].

For investors, Ørsted's strategy presents a nuanced picture. The company's focus on financial discipline and high-quality projects reduces downside risk, particularly in a sector prone to overleveraging. Its US offshore wind exposure, though scaled back, remains a strategic asset, given the country's long-term energy demand and decarbonization goals. However, the absence of a clear policy framework in the US and Europe introduces volatility, with a potential Trump administration's anti-renewables stance potentially delaying permits or triggering project cancellations [2].

References:
[1] https://www.ainvest.com/news/rsted-strategic-capital-raise-offshore-wind-exposure-navigating-renewable-energy-turbulent-waters-2508/
[2] https://www.reuters.com/world/europe/denmarks-orsted-seeks-94-billion-us-wind-market-falters-2025-08-11/