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NextEra Energy To Acquire Interests In Renewables And Operating Wind Assets Portfolios

NextEra Energy Partners, LP (NEP) announced Friday that it has entered into an agreement with subsidiaries of NextEra Energy Resources, LLC to acquire a 49% interest in an approximately 1.5-gigawatt renewables portfolio and approximately 100% of the indirect membership interests in an approximately 345-megawatt (MW) portfolio of operating wind assets.

NextEra Energy Partners expects to acquire the interests in the assets for total consideration of approximately $805 million, plus the assumption of its share of the portfolio's estimated $1.5 billion in tax equity financing, subject to working capital and other adjustments.

NextEra Energy Partners expects to complete the acquisition later this year, subject to customary closing conditions.

Immediately following the acquisition, NextEra Energy Partners will contribute its interests in the newly acquired projects and in six existing renewables assets to a new portfolio.

In conjunction with the acquisition and creation of the new portfolio, NextEra Energy Partners has entered into a 10-year convertible equity portfolio financing with Ontario Teachers' Pension Plan Board, a leading global infrastructure investor, to invest $805 million into the new portfolio.

Under the terms of the financing, the investor will initially fund approximately $645 million, which will be used by NextEra Energy Partners to finance its acquisition of the newly acquired assets.

A second funding of approximately $160 million is expected to occur by the end of the third quarter of 2023 upon the achievement of the commercial operations of Appaloosa Run Wind, Eight Point Wind and Yellow Pine Solar.

The investor is expected to earn an effective annual coupon of approximately 2.8% on the outstanding investment over its initial 10-year period.

Looking ahead, from a base of its fourth quarter 2021 distribution per common unit at an annualized rate of $2.83, NextEra Energy Partners continues to expect 12% to 15% growth per year in limited partner distributions per unit as being a reasonable range of expectations through at least 2025, subject to the usual caveats.

NextEra Energy Partners expects the annualized rate of the fourth-quarter 2022 distribution that is payable in February 2023 to be in a range of $3.17 to $3.25 per common unit.

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