NextEra Energy Resources, a subsidiary of clean energy company NextEra Energy announced today an agreement to sell 50% interest in a 2.5 GW portfolio of wind, solar, and energy storage assets across the U.S to the Ontario Teachers’ Pension Plan Board (OTPP) for $849 million.
The portfolio consists of 13 long-term contracted renewable assets, including a variety of wind and solar facilities across several states in the US, with a total capacity of approximately 2,520 MW. Additionally, Ontario Teachers’ has committed to purchase at least a 25% interest in the $824 million convertible equity portfolio financing announced by NextEra Energy in October 2021.
OTPP, which is one of Canada’s largest investors, recently announced a series of goals aimed at slashing its portfolio emissions and significantly boosting its investments in companies that generate clean energy, reduce demand for fossil fuels, and build a sustainable economy.
Chris Ireland, Managing Director, Greenfield and Renewables at Ontario Teachers’.
“We are excited to make this significant investment and to grow our global portfolio of high-quality renewable energy assets. NextEra Energy is one of the world’s leading renewable energy companies and they share our focus on shaping a better future through the development of sustainable energy. This investment marks the beginning of what we expect will be a long-term partnership with NextEra Energy.”
The proceeds from the agreement are expected to be redeployed into new wind, solar, and battery storage growth opportunities, including NextEra Energy Resources’ more than 18,000-MW renewables and storage backlog. Over the operating life of the assets in the portfolio, the company is also expected to receive ongoing annual fee income, starting with approximately $16 million in year one, and escalating going forward for operations, maintenance, and management services.
NextEra Energy stated that the remaining 50% interest in the portfolio is under an agreement to be sold by NextEra Energy Resources to NextEra Energy Partners, LP.
Jim Robo, NextEra Energy chairman, and CEO, said:
“This transaction is expected to generate significant value for NextEra Energy shareholders. In addition to generating attractive ongoing fee income, the sale of 50% of the portfolio to NextEra Energy Partners and 50% to a high-quality partner like Ontario Teachers’ provides an opportunity to take advantage of the robust demand for high-quality, long-term contracted renewable energy assets and efficiently recycle nearly $3.4 billion in total capital that is expected to 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 the robust renewables development environment that is driving the clean energy transformation reshaping our industry.”