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Canada

Canada pension firm acquires NextEra portfolio

CANADA: Canada Pension Plan Investment Board (CPPIB) has agreed to acquire a 394.2MW portfolio from a NextEra Energy yieldco, including four wind projects and two solar projects.

The 149MW Jericho project comprises 92 GE 1.6-100 turbines
The 149MW Jericho project comprises 92 GE 1.6-100 turbines

The investment firm will acquire the six assets, including the 59.9MW Bluewater, 22.9MW Conestogo, 149MW Jericho, and 122.4MW Summerhaven wind farms, from NextEra Energy Partners for C$741 million ($574 million), it announced.

The portfolio also includes the Moore and Sambra solar PV facilities, both 20MW. All six sites are situated in the eastern province of Ontario.

Affiliates of NextEra Energy Partners, which developed and currently operate the portfolio, will continue to serves as the operator under a ten-year agreement.

CPPIB will also assume $689 million of NextEra Energy Partners’ existing debt as part of the agreement.

NextEra Energy Partners expects to "accretively redeploy the proceeds from this transaction to acquire higher-yielding US assets from either third parties or (parent company) NextEra Energy Resources", chairman and chief executive officer Jim Robo said.

The sale is expected to close during the second quarter of 2018 and is subject to regulatory approval and satisfactory customary closing conditions, NextEra Energy Partners added.

The transaction is valued at approximately ten times CPPIB's operating profit (Ebitda) and a 10% cash yield, based on 2019 estimates, the investors stated.

It is the CPPIB’s "third significant investment in the global renewables sector", the investors added.

In December 2017, CPPIB agreed to form a joint venture (JV) with Votorantim Energia (the energy subsidiary of Brazil’s Votorantim Group) focusing on investments and developments in the Brazilian power generation sector.

And in January 2018, it invested $144 million in Indian renewable energy developer ReNew Power. CPPIB this month invested a further $247 million in the company to help finance its acquisition of Ostro Energy.

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