One of NextEra Energy Resources LLC’s solar farms in Florida
NextEra Energy Partners LP has entered into an settlement with subsidiaries of NextEra Energy Resources LLC to accumulate a 49% curiosity in an roughly 1.5 GW renewables portfolio and roughly 100% of the oblique membership pursuits in an roughly 345 MW portfolio of working wind property.
Immediately following the acquisition, NextEra Energy Partners will contribute its pursuits within the newly acquired tasks and in six present renewables property to a brand new portfolio. In conjunction with the acquisition and creation of the brand new portfolio, NextEra Energy Partners has entered right into a convertible fairness portfolio financing with Ontario Teachers’ Pension Plan Board (Ontario Teachers), a worldwide infrastructure investor, to take a position $805 million into the brand new portfolio.
“The transactions announced today demonstrate NextEra Energy Partners’ continued ability to execute on its long-term growth plan and continued access to attractive low-cost sources of capital,” states John Ketchum, chairman and CEO. “The acquisition of the high-quality, long-term contracted renewable energy assets further enhances the diversity of the partnership’s existing portfolio.”
“Combining this acquisition with the recapitalization of six existing NextEra Energy Partners’ assets through the convertible equity portfolio financing with a global infrastructure investor is expected to provide significant benefits for unitholders, including a low cash coupon and the ability to retain upside from the share price appreciation for up to 10 years,” Ketchum provides. “This significant access to low-cost capital leaves NextEra Energy Partners uniquely positioned to take advantage of the transformation underway in the energy industry and meet its long-term growth objectives. In our view, NextEra Energy Partners remains well positioned to deliver unitholder value going forward.”
The contracted renewables portfolio of wind and solar property to be acquired has a money obtainable for distribution (CAFD)-weighted remaining contract life of roughly 15 years and common buyer credit standing of A+ at S&P and A2 at Moody’s Investors Service. The property included are 49% of the membership pursuits in Emerald Breeze, an present portfolio holding firm, which not directly owns:
Great Prairie Wind, an roughly 1,029 MW wind technology facility situated in Texas and Oklahoma. It contains Appaloosa Run Wind, an roughly 172 MW wind technology facility situated in Texas; Eight Point Wind, an roughly 111 MW wind technology facility situated in New York; and Yellow Pine Solar, an roughly 125 MW solar technology and 65 MW storage facility situated in Nevada. The firm can have 100% of the oblique membership pursuits in Elk City Wind II, an roughly 107 MW wind technology facility situated in Oklahoma; Sac County Wind, an roughly 80 MW wind technology facility situated in Iowa; and Sholes Wind, an roughly 160 MW wind technology facility situated in Nebraska.
NextEra Energy Partners expects to accumulate the pursuits within the property for whole consideration of roughly $805 million, plus the belief of its share of the portfolio’s estimated $1.5 billion in tax fairness financing, topic to working capital and different changes. NextEra Energy Partners expects to finish the acquisition later this yr, topic to customary closing circumstances. At the time of the closing, all the property apart from Appaloosa Run Wind, Eight Point Wind and Yellow Pine Solar can be in operation, with Appaloosa Run Wind and Eight Point Wind anticipated to be in service in December 2022 and Yellow Pine Solar scheduled to start preliminary operations by the tip of the third quarter of 2023.
If any of these tasks don’t obtain business operation by Nov. 30, 2023, NextEra Energy Partners can have the precise to require the vendor to repurchase the possession pursuits in such tasks for a similar buy worth paid by NextEra Energy Partners. Following the acquisition and all the tasks reaching business operation, the portfolio of property is predicted to contribute adjusted EBITDA of roughly $210 million to $230 million and CAFD of roughly $62 million to $72 million, every on a five-year common annual run-rate foundation, starting Dec. 31, 2023.
Immediately following the acquisition, NextEra Energy Partners will contribute its pursuits within the newly acquired tasks to a brand new portfolio alongside six of the partnership’s present wind property: Alta Wind VIII, Brady Wind, Brady Wind II, Golden West Wind, Osborn Wind and Oliver Wind III.