Global alternative asset and private equity investor KKR (NYSE:KKR) announced that it has entered a series of renewable energy investment agreements worth $2 billion with energy provider NextEra Energy, Inc. (NYSE: NEE), and NextEra Energy Partners, LP (NYSE:NEP).
KKR stated that it will invest approximately $1.4 billion in two transactions for interests in 1,625 megawatts (MW) of contracted utility-scale wind and solar assets. These deals include a $300 million direct equity purchase from NextEra Energy Inc. subsidiary NextEra Energy Resources for a 50% interest in a 1,000 MW portfolio, and a $1.1 billion convertible equity portfolio financing agreement with NextEra Energy Partners for an interest in a 1,125 net MW portfolio. KKR is investing in the transactions along with a consortium of private infrastructure investors, including Healthcare of Ontario Pension Plan (HOOPP Infrastructure), the CAAT Pension Plan and Varma Mutual Pension Insurance Company.
Additionally, KKR signed a Letter of Intent with NextEra Energy Partners to invest approximately $900 million in future renewable energy transactions to provide access to capital for future growth.
Brandon Freiman, KKR Partner and Head of North American Infrastructure, said:
“We are pleased to participate in this landmark transaction to acquire contracted, highly diversified renewable energy assets and support the future growth of NextEra Energy, the world’s largest generator of energy from the wind and sun. We have built a strong relationship with the NextEra Energy Partners team through our two prior transactions and we are proud to support the development of future clean energy projects while delivering attractive exposure for our investors to core infrastructure assets.”
According to NextEra, the proceeds from the transaction are expected to be redeployed into new wind, solar and battery storage growth opportunities, including NextEra Energy Resources’ more than 15,000-MW renewables backlog. The equity financing KKR is providing NextEra Energy Partners will be used to grow the portfolio of jointly-owned renewable generation assets to over 2.3 GW. Affiliates of NextEra Energy will continue to operate, maintain and manage the facilities on behalf of the partners.
Jim Robo, NextEra Energy Chairman and CEO, said:
“These transactions are expected to generate significant value for NextEra Energy shareholders. In addition to generating attractive ongoing fee income, the sale provides an opportunity to take advantage of the robust demand for high-quality, long-term contracted renewable energy assets and efficiently recycle approximately $1.3 billion in total capital that can be redeployed into new renewables growth opportunities. The transactions highlight the value of NextEra Energy Resources’ best-in-class development platform and position us well to continue to capitalize on what we believe to be the best renewables development environment in our history.”
KKR has become increasingly active in its investments in growing its portfolio of renewable energy assets. Last week, the company announced the launch of Virescent Infrastructure, a new platform aiming to acquire, own and operate renewable assets in India, in anticipation of a major renewable energy push in the country over the next several years.
NextEra is a world leader in renewable energy growth. After investing over $20 billion in renewable assets, NextEra has become the world’s largest generator of wind and solar power with a portfolio of more than 17,000 megawatts of renewable energy. The company has also invested significantly in developing a portfolio of battery storage assets.