NextEra Energy, Inc. (NYSE: NEE) announced that a subsidiary of NextEra Energy Resources, LLC has entered into an agreement to sell a 50% non-controlling interest in an approximately 2,520 megawatt (MW) portfolio of long-term contracted renewables assets (the portfolio) to the Ontario Teachers’ Pension Plan Board (Ontario Teachers’ or the investor), one of the world’s largest pension plans and a leading 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 (NYSE: NEP) 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 the new wind, solar, and battery storage growth opportunities, including NextEra Energy Resources’ more than 18,000-MW renewables and storage backlog. This attractive capital recycling opportunity provides significant value to NextEra Energy Resources and highlights the value of its renewables development platform. Over the operating life of the assets in the portfolio, NextEra Energy Resources is also expected to receive an ongoing annual fee income of approximately $16 million in year one and escalating thereafter for operations, maintenance, and management services, and the transaction is expected to be accretive to earnings and generate an overall improvement in net present value for NextEra Energy shareholders.
The contracted renewables portfolio of wind, solar and solar-plus-storage assets has a strong and diverse mix of investment-grade counterparties and cash available for distribution (CAFD)- weighted remaining contract life of approximately 19 years. The portfolio to be acquired by the investor consists of 50% of the indirect membership interests in:
- White Mesa Wind, an approximately 501-MW wind generation facility in Texas.
- Irish Creek Wind, an approximately 301-MW wind generation facility in Kansas.
- Hubbard Wind, an approximately 300-MW wind generation facility in Texas.
- Cool Springs Solar, an approximately 213-MW solar generation and 40-MW solar storage facility in Georgia.
- Little Blue Wind, an approximately 251-MW wind generation facility in Nebraska.
- Dodge Flat Solar, an approximately 200-MW solar generation and 50-MW solar storage facility in Nevada.
- Elora Solar, an approximately 150-MW solar generation facility in Tennessee.
- Quitman II Solar, an approximately 150-MW solar generation facility in Georgia.
- Fish Springs Ranch Solar, an approximately 100-MW solar generation and 25-MW solar storage facility in Nevada.
- Minco Wind Energy III, an approximately 107-MW wind generation facility in Oklahoma.
- Ensign Wind Energy, an approximately 99-MW wind generation facility in Kansas.
- Borderlands Wind, an approximately 99-MW wind generation facility in New Mexico.
- Quinebaug Solar, an approximately 49-MW solar generation facility 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.