NextEra Energy Partners (NEP) has agreed to acquire a US renewable portfolio of contracted wind and solar projects with a combined capacity of around 611MW, from a subsidiary of NextEra Energy Resources, for about $1.02bn.
The renewable portfolio comprises six utility projects that are located in different parts of the US.
From NextEra Energy Resources, NEP will be acquiring 100% stakes in the 120MW Ashtabula II Wind Energy Center in North Dakota, the 150MW Story County II Wind Energy Center in Iowa and the 150MW White Oak Wind Energy Center in Illinois.
It will also be acquiring a stake of 49.99% each in the 62.25MW Marshall Solar Energy Center in Minnesota, the 70MW Roswell Solar Energy Center in New Mexico and the 250MW Silver State South Solar Energy Center in Nevada.
The transaction, which will be subject to customary closing conditions and certain regulatory approvals, is expected to be closed in the second quarter of 2019.
The acquired six renewable energy assets will join four existing wind assets of NEP, with a combined capacity of 581MW, in a new portfolio with a power generation capacity of about 1.19GW. NEP has signed an agreement with global investment firm KKR to secure an equity investment of $900m in the new renewable portfolio.
The four wind farms to be bundled alongside the acquired renewable energy assets are the 99MW Perrin Ranch Wind Energy Center in Arizona, the 120MW Tuscola Bay Wind Energy Center in Michigan, the 62MW Ashtabula III Wind Energy Center in North Dakota and the 300MW Stateline Holdings Wind Energy Center in Washington.
NEP chairman and CEO Jim Robo said: “The acquisition of approximately 611 megawatts of high-quality, contracted renewable energy assets enhances the diversity of the partnership’s existing portfolio.
“Combining this acquisition with the recapitalization of existing project debt on four existing NextEra Energy Partners’ assets is expected to provide significant benefits for unitholders. The convertible equity portfolio financing is expected to be a very attractive, low-cost, equity-like product that further improves the partnership’s financing flexibility.”
KKR’s equity interest will be made in a newly-formed structured partnership with NEP in which the latter has certain rights to acquire the investment firm’s interest over time at pre-determined return levels between 3.5 and 7.0 years upon formation of the partnership.
KKR infrastructure business head Brandon Freiman said: “We’re excited to partner with NextEra, a world class renewable energy developer and operator, on this portfolio of high quality contracted wind and solar assets.
“This diverse portfolio of ten fully-operational renewable energy projects, all of which benefit from long-term contracts with investment grade customers, is an excellent addition to our portfolio.”