Energy company NiSource announced an agreement to sell a 19.9% stake in its Indiana-based electricity and gas utility NIPSCO to alternative investment manager Blackstone’s infrastructure investment unit Blackstone Infrastructure Partners, in a transaction valued at $2.4 billion
The transaction value includes $2.15 billion for the equity interest, and a $250 million commitment to fund ongoing capital requirements, and comes as NIPSCO is undergoing one of the most rapid transitions away from coal-fired electricity in the U.S. utilities sector.
NIPSCO has set a target of 0% coal-fired generation mix by 2028, compared to 75% coal generation mix in 2018, and expects to invest $3.5 billion through 2030 in electric generation transition investments, with a primary focus on replacing coal generation with new renewable energy installations. NIPSCO said that it will also support the growth and modernization of its gas and electric transmission and distribution systems, which the company added “will play critical roles in the energy transition.”
Mike Hooper, President and Chief Operating Officer of NIPSCO said:
“Once completed, this transaction will also strengthen our ability to invest in major renewable generation projects and make capital enhancements to existing electric and gas infrastructure to add resiliency to our system.”
The transaction marks the latest in a series of energy transition focused investments for Blackstone, including the $1.5 billion acquisition of a renewable energy portfolio from AEP alongside CDPQ and Invenergy earlier this year, and the acquisition of rooftop solar mounting company, Esdec Solar in late 2022 alongside Rivean Capital.
Last year Blackstone stated that it sees an opportunity to invest an estimated $100 billion in energy transition and climate change solutions projects over the next decade.
Sean Klimczak, Global Head of Infrastructure at Blackstone, said:
“This agreement underscores Blackstone’s commitment to decarbonization to create value for our investors and our desire to help facilitate the reindustrialization of the Midwest.”