NextEra Energy Partners is to acquire wind farms in the US states of California and New Hampshire totalling 391MW from Brookfield Renewable for $733m (€609m).
The projects are the 150MW Alta Wind 8, 120MW Windstar and 22MW Coram in California and the 99MW Granite in New Hampshire.
Almost all of the capacity is contracted with investment-grade counterparties and a cash available for distribution (CAFD)-weighted remaining contract life of approximately 13 years at the time of closing.
The wind farms are located in markets with significant long-term renewables demand, supporting potential re-contracting or repowering opportunities after the initial contract terms, the buyer said.
NextEra Energy Partners plans to finance the transaction with a combination of undrawn funds remaining from the 2020 convertible equity portfolio financing and existing debt capacity.
The acquired assets are expected to contribute adjusted EBITDA and CAFD of approximately $63m to $70m, each on a five-year average run-rate basis starting 31 December 2021.
The transaction is subject to approval from the Federal Energy Regulatory Commission and New Hampshire Site Evaluation Committee, as well as expiration or termination of the waiting period under the Hart-Scott-Rodino Act.
NextEra Energy Partners expects to complete the acquisition in the third quarter of this year, subject to customary closing conditions and the receipt of regulatory approvals.
NextEra Energy Partners chairman and chief executive Jim Robo said: “This transaction demonstrates NextEra Energy Partners’ continued ability to execute its long-term growth plan.
“This acquisition of approximately 400MW of long-term contracted wind projects with high-credit-quality customers further enhances the diversity of the partnership’s existing portfolio.
“This portfolio is an attractive acquisition for NextEra Energy Partners and is supported by our ability to leverage NextEra Energy Resources’ best-in-class operating platform to reduce costs and create value for LP unitholders.
“The assets are well-situated in strong markets with long-term renewables demand, providing long-term optionality for the portfolio.
“The transaction also provides an accretive investment opportunity to deploy the proceeds from the second draw of our 2020 convertible equity portfolio financing, illustrating NextEra Energy Partners’ ability to leverage its value-enhancing financing structures to support long-term growth.
“NextEra Energy Partners remains on a trajectory to grow our LP distributions per unit by 12% to 15% through 2024, and, in our view, the partnership has never been better positioned to deliver unit-holder value going forward.”