US utility Duke Energy is selling a minority interest in a portion of its commercial renewable energy portfolio to the John Hancock Infrastructure Fund (JHIF) and John Hancock Life Insurance Company.
The total enterprise value of the portion of Duke Energy’s commercial renewable energy portfolio being sold is $1.25bn, including proportional existing project-level debt.
Once the sale has closed in the second half of 2019, John Hancock’s interest will represent around 1.2GW of generating capacity.
The deal comprises 49% of 37 operating wind, solar and battery storage assets and 33% of 11 operating solar assets across the US.
The sale will result in pre-tax proceeds to Duke Energy of $415m.
As majority owner, Duke Energy will continue to grow its commercial renewable energy business.
The money raised will help fund the company’s future growth capital plans with proceeds used to reduce future debt issuance needs.
Duke Energy will retain the majority of the remaining tax benefits from the projects.
John Hancock will also have the right to acquire a minority interest in certain additional wind and solar projects in the future, providing a potential source of future growth capital to Duke Energy.
The sale is subject to customary closing conditions, including approvals from the Federal Energy Regulatory Commission, the Public Utility Commission of Texas and the Committee on Foreign Investment in the United States.
JHIF, an infrastructure-focused private equity fund with approximately $2bn of committed capital, is managed by John Hancock’s infrastructure team and is part of Manulife Private Markets.
Morgan Stanley served as exclusive financial advisor and Hunton Andrews Kurth acted as legal advisor to Duke Energy, while John Hancock was advised by law firms Mayer Brown and Day Pitney.