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NextEra Energy Partners, LP to acquire major interest in renewables portfolios

Working with subsidiaries of NextEra Energy Resources, LLC, NextEra Energy Partners, LP announced this week that it will acquire a 49 percent interest in an approximately 1.5 GW renewables portfolio and full indirect membership interests in an approximately 345 MW portfolio of wind assets.

These long-term contracted renewables will amount to about a 1,080 MW net interest for the company, which will be contributed alongside six existing renewables assets into a new, 10-year convertible equity portfolio. Financing for that will reach $805 million through arrangements with the Ontario Teachers’ Pension Plan Board.

“The acquisition of the high-quality, long-term contracted renewable energy assets further enhances the diversity of the partnership’s existing portfolio,” John Ketchum, chairman and CEO, said. “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. 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.”

Interests in the assets should be acquired later this year at a total consideration of approximately $805 million, plus the assumption of NextEra’s share of the portfolio’s estimated $1.5 billion in tax equity financing. At that time, the company will add to its portfolio: Great Prairie Wind (1,029 MW) facility in Texas and Oklahoma; Appaloosa Run Wind (172 MW) facility in Texas; Eight Point Wind (111 MW) facility in New York; Yellow Pine Solar (125 MW of solar; 65 MW of storage) in Nevada; Elk City Wind II (107 MW) in Oklahoma; Sac County Wind (80 MW) in Iowa) and Sholes Wind (160 MW) in Nebraska.

When the investment concludes, NextEra expects all facilities other than Appaloosa Run Wind, Eight Point Wind, and Yellow Pine Solar to be in operation. Appaloosa and Eight Point should follow in December 2022, but Yellow Pine likely won’t enter operations until late 2023. For any projects that fail to achieve commercial operation by Nov. 30, 2023, NextEra Energy Partners will have the right under its contract to require the seller to repurchase ownership interests for the same purchase price paid.

Chris Galford

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