Duke Energy to sell commercial distributed generation business
Duke Energy is selling its commercial distributed generation business to an affiliate of ArcLight Capital Partners.
The sale to ArcLight Capital, a leading middle market infrastructure investor, is valued at $364 million, inclusive of non-controlling tax equity interests. Duke Energy expects approximately $259 million of proceeds from the transaction.
This follows news in early June that Duke Energy will sell its utility-scale renewables business platform. The company expects to finalize both of these sales by the end of 2023.
The transactions will support Duke Energy’s focus on the growth of its regulated businesses, including investments to enhance grid reliability and incorporate over 30,000 megawatts of regulated renewable energy onto its system by 2035.
“The sale of our commercial renewables businesses streamlines our portfolio and provides the resources to support the long-term needs of our customers in our growing regulated territories,” Lynn Good, Duke Energy chair, president and CEO, said. “Over the next decade, we plan to invest significant amounts of capital to fund the critical energy infrastructure necessary to serve our customers and support our clean energy transition.”
The distributed generation business includes REC Solar operating assets, development pipeline and O&M portfolio, as well as distributed fuel cell projects managed by Bloom Energy. Employees of the distributed generation business will transition to ArcLight to maintain business continuity.
“Our investment in Duke Energy’s commercial distributed generation business supports ArcLight’s long-standing strategy of acquiring operating assets from leading strategics and creating strong stand-alone renewable platforms. We believe this is an attractive opportunity to acquire a first-rate commercial distributed generation portfolio, partner with a talented team and build upon longstanding, high quality customer relationships,” Marco Gatti, managing director at ArcLight, said.
The sale is subject to customary closing conditions and regulatory approvals.
BofA Securities is serving as the financial advisor and Mayer Brown is serving as the legal counsel to Duke Energy for this transaction.
