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NextEra Energy acquires 50% interest in massive renewables portfolio

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NextEra Energy Partners announced this Friday it has entered into an agreement with a subsidiary of NextEra Energy Resources to acquire a 50% interest in a massive renewable energy portfolio. In addition to the acquisition, the company entered into an $$824 million convertible equity portfolio financing with Apollo Global Management.

Firstly, the company expects to acquire 50% interest in the portfolio for a total consideration of $849 million. However, the transaction is still subject to working capital and other adjustments.

Moreover, the acquisition will contribute adjusted EBITDA of approximately $184 million to $194 million; CAFD of approximately $58 million to $67 million; each on a five-year average annual run-rate basis, as of Dec. 31, 2022.

According to the statement, the company will close the transaction later this year or in early 2022. The portfolio consists of solar, wind plus energy storage assets, with a total capacity of 2,520-megawatts. All of the projects are newly constructed or in the process of construction. Specifically, the battery storage capacity of the portfolio is 115MW.

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NextEra Energy to better position itself to launch energy transformation in the US

Furthermore, the projects are located in various states of the US, including Nebraska, Texas, Nevada, Kansas, Georgia and Oklahoma. Jim Robo, CEO of NextEra Energy, said about the acquisition. “It extends the partnership’s geographic footprint into three new states and expands its ownership of battery storage assets, which would total nearly 90 megawatts at the close.”

On the other hand, as outlined above, the company entered into a partnership with Apollo for an $824 million convertible equity portfolio financing agreement. The financing will provide the company with the flexibility to periodically buy out the investor’s equity interest in the portfolio; between the five- and 10-year anniversaries of the agreement.

About the financing, Robo remarked. “Is the lowest cost in the partnership’s history, with a more than 250 basis points lower implied return to the investor in the buyout price than the first iterations of the structure in 2018 and early 2019.”

Finally, the executive remarked that after acquiring the portfolio and the financing agreement, it will be “uniquely positioned to take advantage of the clean energy transformation and meet its long-term growth objectives.”

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