On Monday, NextEra Energy, acting under its NextEra Energy Partners clean energy subsidiary, announced that it is buying a 391-megawatt (MW) portfolio of four operating wind generation facilities in California and New Hampshire from global private equity investor Brookfield Renewables. The purchase price is $733 million, subject to closing adjustments.
“This transaction demonstrates NextEra Energy Partners’ continued ability to execute its long-term growth plan,” said Jim Robo, chairman and chief executive officer. “This acquisition of approximately 400 megawatts of long-term contracted wind projects with high-credit-quality customers further enhances the diversity of the partnership’s existing portfolio. This portfolio is an attractive acquisition for NextEra Energy Partners and is supported by our ability to leverage NextEra Energy Resources’ best-in-class operating platform to reduce costs and create value for LP unitholders.”
Robo characterized the assets as being “well-situated in strong markets with long-term renewables demand,” providing long-term optionality for the portfolio. He said NextEra Energy Partners remains on track grow its LP distributions per unit by 12 percent to 15 percent through 2024, adding that (in his view) the partnership “has never been better positioned” to deliver unitholder value.
The portfolio includes four wind generation facilities, totaling 391 MW. Almost all of the portfolio’s capacity is contracted with investment-grade counterparties and a cash available for distribution (CAFD)-weighted remaining contract life of approximately 13 years at the time of closing. The assets are located in markets with significant long-term renewables demand, supporting potential re-contracting or repowering opportunities after the initial contract terms.
The assets include three facilities in California: Alta Wind VIII (150 MW), Windstar (120 MW), Coram (22MW), as well as the 99MW Granite wind generating facility in New Hampshire.
NextEra Energy Partners says it will fund the deal with a combination of undrawn funds left over from its 2020 convertible equity portfolio financing, and existing debt capacity. The acquired assets are expected to contribute adjusted EBITDA and CAFD of approximately $63 to $70 million, each on a five-year average run-rate basis, beginning Dec. 31, 2021. NextEra Energy Partners now expects a Dec. 31, 2021, run rate for adjusted EBITDA in the upper end of its previously announced range of $1.44 billion to $1.62 billion
The transaction is subject to approval from the Federal Energy Regulatory Commission (FERC) and New Hampshire Site Evaluation Committee, as well as expiration or termination of the waiting period under the Hart-Scott-Rodino Act. NextEra Energy Partners expects to complete the acquisition in the third quarter of 2021, subject to customary closing conditions and the receipt of regulatory approvals.
