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GIP to buy NRG Energy's renewables unit

UNITED STATES: Investment firm Global Infrastructure Partners (GIP) has agreed to acquire NRG Energy's US renewable energy business.

NRG Yield's renewable energy portfolio includes the 1.55GW Alta wind complex (above)
NRG Yield's renewable energy portfolio includes the 1.55GW Alta wind complex (above)

The deal includes NRG Energy’s controlling stake and 46% economic interest in yieldco, NRG Yield, which has an operational portfolio comprising wind, solar, and natural gas projects with a combined capacity of more than 5.1GW.

NRG Yield owns 32 wind farms - including the 947MW Alta wind complex in California - with a combined capacity of nearly 3GW, according to its website.

GIP will also acquire NRG’s operations and maintenance (O&M) business that serves 2.4GW of renewable energy projects in 17 states, and a project pipeline with a combined capacity of more than 6.4GW.

GIP is acquiring the business for $1.375 billion in cash. It will also provide backstop support for NRG Yield’s agreed purchase of the 500MW Carlsbad Energy Centre natural gas project in southern California.

Adebayo Ognlesi, chairman and managing partner of GIP, said: "We are excited to announce the acquisition of NRG’s world class renewable business.

"We view each of the three acquired businesses as highly complementary and well positioned to capitalise on the increasing market demand for low-cost, clean energy.

"We look forward to working with management to develop new renewable generation assets and to supporting the company with our deep operating and financial expertise in the sector.

"We are also excited about the opportunity to grow the value of NRG Yield, which allows public market investors to access attractive investments in renewable energy."

In July, NRG Energy announced a ‘Transformation Plan’ to reduce company debt by $13 billion and raise $4 billion in revenue. Divesting 6GW of its conventional power generation assets and between 50% and 100% of its interest in NRG Yield and its renewables platform, were among options being considered, the plan suggested.

The NRG acquisition is just GIP’s latest investment in the renewables sector. It has previously invested $9 billion of equity in renewable energy, including 8GW of operating renewable assets and more than 14GW of renewable assets under construction or in development.

Global Infrastructure Partners bought Singaporean company Equis Energy and its 11GW-plus renewables portfolio for $5 billion.

It had also previously agreed to buy 50% of Ørsted’s 450MW Borkum Riffgrund 2 offshore project, and half of the company’s 330MW Gode Wind 1 site.

GIP has also invested in crude oil companies, coal-powered generation and liquefied natural gas (LNG) facilities), according to its website.

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