Canadian Pension Capital and KKR Help Finance NextEra’s Renewable Energy Empire

Posted on 11/03/2020

Private equity firm KKR announced the signing of agreements with NextEra Energy Resources, LLC, a subsidiary of NextEra Energy, Inc. (NYSE: NEE), and NextEra Energy Partners, LP (NYSE: NEP) relating to two separate transactions to acquire equity interests in portfolios of contracted utility-scale wind and solar assets. KKR will invest approximately US$ 1.4 billion in total in the two transactions for interests in 1,625 megawatts (MW) of renewable energy assets. The assets in the portfolios consist of 12 distinct operating utility-scale wind and solar assets in geographically diverse locations throughout the United States. The assets have approximately 19 years of remaining weighted average power purchase agreement (PPA) duration contracted with investment grade counterparties.

KKR has also signed a Letter of Intent with NextEra Energy Partners to invest approximately US$ 900 million in future renewable energy transactions to provide access to capital for future growth.

Deal #1

KKR will invest approximately US$ 300 million direct equity purchase from NextEra Energy Resources for a 50% interest in a 1,000 megawatt (MW) portfolio

Deal #2

KKR entered into a US$ 1.1 billion convertible equity portfolio financing agreement with NextEra Energy Partners for an interest in a 1,125 net MW portfolio.

KKR will make the investment through its core infrastructure strategy, as well as with participation by Healthcare of Ontario Pension Plan (HOOPP Infrastructure), the CAAT Pension Plan (Colleges of Applied Arts and Technology Pension Plan), and Varma Mutual Pension Insurance Company.

NextEra Energy Partners is a growth-oriented limited partnership formed to acquire, manage and own contracted clean energy projects with stable long-term cash flows.

Selling Off Deal

In June 2019, NextEra Energy Resources, a subsidiary of NextEra Energy, Inc., sold the following to NextEra Energy Partners: 100% of the membership interests in Ashtabula Wind II, LLC, a project company that owns a 120 MW wind generation facility located in North Dakota; 100% of the membership interests in Garden Wind, LLC, a project company that owns a 150 MW wind generation facility (Story County II) located in Iowa; 100% of the membership interests in White Oak Energy Holdings, LLC, which owns 100% of the membership interests of White Oak Energy LLC, which owns a 150 MW wind generation facility located in Illinois; 100% of the Class C membership interests in Rosmar Holdings, LLC (Rosmar), which represent a 49.99% noncontrolling ownership interest in two solar generation facilities, Marshall and Roswell, with a total combined generating capacity of approximately 132 MW located in Minnesota and New Mexico, respectively; and 49.99% of the membership interests, representing a controlling ownership interest, in Silver State South Solar, LLC (Silver State), which indirectly owns a 250 MW solar generation facility located in Nevada.

NextEra Energy Resources retained ownership interests in Rosmar and Silver State and remains the managing member of Rosmar. The purchase price from NextEra Energy Partners included approximately US$ 1.02 billion in cash consideration, plus working capital of US$ 12 million.

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