NextEra Energy Inc.’s NextEra Energy Resources LLC subsidiary has entered into an agreement to sell a 50% non-controlling interest in an approximately 2,520 MW portfolio of long-term contracted renewables assets (the portfolio) to the Ontario Teachers’ Pension Plan Board, a pension plan and infrastructure investor, with approximately C$227.7 billion in net assets.
The remaining 50% interest in the portfolio is under an agreement to be sold by NextEra Energy Resources to NextEra Energy Partners LP, pursuant to a purchase and sale agreement executed on Oct. 21, 2021 between a subsidiary of NEP and a subsidiary of NextEra Energy Resources.
The sale proceeds are expected to be redeployed into new wind, solar and battery storage growth opportunities, including NextEra Energy Resources’ more than 18,000 MW renewables and storage backlog.
Over the operating life of the assets in the portfolio, NextEra Energy Resources is also expected to receive ongoing annual fee income of approximately $16 million in year one and escalating thereafter for operations, maintenance and management services. The transaction is expected to be accretive to earnings and generate an overall improvement in net present value for NextEra Energy shareholders.
“This transaction is expected to generate significant value for NextEra Energy shareholders,” says Jim Robo, NextEra Energy’s chairman and CEO. “In addition to generating attractive ongoing fee income, the sale of 50 percent of the portfolio to NextEra Energy Partners and 50 percent to a high-quality partner like Ontario Teachers’ provides an opportunity to take advantage of the robust demand for high-quality, long-term contracted renewable energy assets and efficiently recycle nearly $3.4 billion in total capital that is expected to be redeployed into new renewables growth opportunities.”
“We are excited to make this significant investment and to grow our global portfolio of high-quality renewable energy assets,” states Chris Ireland, managing director of Greenfield and Renewables at Ontario Teachers’. “NextEra Energy is one of the world’s leading renewable energy companies and they share our focus on shaping a better future through the development of sustainable energy. This investment marks the beginning of what we expect will be a long-term partnership with NextEra Energy.”
The contracted renewables portfolio to be acquired by the investor consists of 50% of the indirect membership interests in the following wind generation facilities: White Mesa Wind (501 MW) and Hubbard Wind (300 MW) in Texas, Irish Creek Wind (301 MW) and Ensign Wind Energy (99 MW)in Kansas, Little Blue Wind (251 MW) in Nebraska, Minco Wind Energy III (107 MW) in Oklahoma, and Borderlands Wind (99 MW) in New Mexico.
The following solar generation and solar storage facilities are also included: Cool Springs Solar (213 MW and 40 MW) in Georgia, Dodge Flat Solar (200 MW and 50 MW) in Nevada, and Fish Springs Ranch Solar (100 MW and 25 MW) in Nevada.
Three solar generation facilities are also part of the agreement: Elora Solar (150 MW) in Tennessee, Quitman II Solar (150 MW) in Georgia and Quinebaug Solar (49 MW) in Connecticut.
NextEra Energy expects to sell the interests in the assets for a total consideration of approximately $849 million, subject to working capital and other adjustments, plus the investor’s share of the portfolio’s total tax equity financings, which is estimated to be approximately $866 million at the time of closing. NextEra Energy expects to close the transaction later this year or in early 2022, subject to customary closing conditions and receipt of certain regulatory approvals.
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