NRG Yield Inc. has entered into an agreement with Terra-Gen Power LLC to acquire the Alta Wind Energy Center (AWEC) in California for $870 million. According to the companies, the multi-phase wind farm is the largest in North America.
The acquisition, which totals 947 MW of operating wind capacity, also includes a portfolio of land leases associated with the Alta Wind facility. The AWEC is made up of several phases and features 386 GE and Vestas turbines, with commercial operations achieved within the past four years. The facility has long-term power purchase agreements with utility Southern California Edison.
This transaction will grow the combined wind portfolio owned by NRG Yield and its parent, NRG Energy, to about 2.84 GW. NRG Yield says it intends to fund the purchase price through a combination of newly issued debt, common equity and cash on hand.
"Alta Wind is a landmark investment for NRG Yield," comments David Crane, NRG Yield's chairman and CEO. "The acquisition of the largest wind facility on the North American continent highlights not only our commitment to carbon-free generation, but also the strength of our acquisition capabilities to compete for contracted assets of world-class quality in the competitive marketplace."
Bank of America Merrill Lynch acted as exclusive financial advisor to NRG Yield in relation to this transaction, and Jones Day served as legal counsel to the company.
Terra-Gen says it will use proceeds from the sale to repay outstanding indebtedness under the Terra-Gen Finance credit facility to make distributions to its owners and for additional corporate purposes. Terra-Gen Operating Co. will continue to provide asset management and operations and maintenance services AWEC after the sale.
Citigroup and Morgan Stanley advised on the sale. Latham & Watkins served as Terra-Gen's lead transaction counsel.
The transaction is subject to customary closing conditions, including the receipt of regulatory approval by the Federal Energy Regulatory Commission, the U.S. Department of Justice and the Federal Trade Commission under the Hart-Scott-Rodino Act, as well as a notice of the acquisition to the California Public Utilities Commission. NRG and Terra-Gen say they expect to close the deal in the third quarter of this year.