Duke Energy has entered into a definitive agreement to sell a minority interest in a portion of its commercial renewable energy portfolio to the John Hancock Infrastructure Fund (JHIF) and John Hancock Life Insurance Co. (U.S.A), a division of Toronto-based Manulife Financial Corp.
The portfolio is owned and operated by Duke Energy Renewables. The total enterprise value of this portion of the portfolio is approximately $1.25 billion (including proportional existing project-level debt). The sale will result in pre-tax proceeds to Duke Energy of $415 million.
As majority owner, Duke Energy says it remains committed to growing its commercial renewable energy business. The transaction will help fund the company’s future growth capital plans, and the proceeds will be used to reduce future debt issuance needs. Duke Energy will retain the majority of the remaining tax benefits of the projects.
Specifically, Duke Energy is selling 49% of 37 operating wind, solar and battery storage assets and 33% of 11 operating solar assets across the U.S. Once the sale has closed, John Hancock’s interest will represent approximately 1.2 GW of generating capacity.
John Hancock will also have the right to acquire a minority interest in certain additional wind and solar projects in the future, providing a potential source of future growth capital to Duke Energy.
“We look forward to working alongside John Hancock as we continue providing clean and affordable energy to our customers across the country,” states Rob Caldwell, president of Duke Energy Renewables. “We will continue to develop projects, grow our portfolio and maintain overall operational responsibilities for the projects just as we do today. John Hancock’s investment offers clear validation of the strength of our existing portfolio, and this partnership provides an opportunity for ongoing collaboration and investment as we deliver long-term value to our customers and investors.”
The sale is subject to customary closing conditions, including approvals from the Federal Energy Regulatory Commission, the Public Utility Commission of Texas and the Committee on Foreign Investment in the United States.
The transaction is expected to close in the second half of the year. Morgan Stanley served as exclusive financial advisor and Hunton Andrews Kurth LLP served as legal advisor to Duke Energy. John Hancock was advised by Mayer Brown LLP and Day Pitney LLP.
