Duke Energy completes sale of distributed generation portfolio to ArcLight

Published on October 10, 2023 by Dave Kovaleski

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Duke Energy completed the sale of its commercial distributed generation portfolio to an investment fund managed by ArcLight Capital Partners.

The agreement, which was previously announced on July 5, includes REC Solar’s operating assets, development pipeline and O&M portfolio, as well as distributed fuel cell projects managed by Bloom Energy.

ArcLight’s acquisition effectively expands its focus on developing standalone renewable platforms across the infrastructure sector. Employees of the distributed generation business will transition to ArcLight to maintain business continuity.

BofA Securities is serving as the financial advisor and Mayer Brown is the legal counsel to Duke Energy for this transaction. Scotia is serving as the financial advisor and Kirkland & Ellis is serving as the legal counsel to ArcLight.

Also, Duke Energy is finalizing the sale for its utility-scale renewables business platform, which it expects to close on by the end of 2023.

Proceeds from these transactions will be used to strengthen the company’s balance sheet and avoid additional holding company debt issuances. In addition, the transactions support Duke Energy’s focus on the growth of its regulated businesses, including investments to enhance grid reliability and help incorporate over 30,000 megawatts of regulated renewable energy onto its system by 2035.

Duke Energy, headquartered in Charlotte, is one of America’s largest energy holding companies. Its electric utilities serve 8.2 million customers in North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky, and collectively own 50,000 megawatts of energy capacity. Its natural gas unit serves 1.6 million customers in North Carolina, South Carolina, Tennessee, Ohio and Kentucky.

ArcLight Capital Partners, based in Boston, is middle-market infrastructure investment firm. It helped establish infrastructure as an asset class by pioneering an asset-based private equity approach to investing in infrastructure.