EDP Renewables (EDPR) has reached an agreement with Fiera Axium Infrastructure US LP to sell a minority cash equity interest in a U.S. wind portfolio with a total production capacity of 1,101 MW. EDPR says Fiera Axium's interest in the portfolio will represent 394.5 MW and is the second asset rotation transaction between the two companies, further strengthening the existing partnership.
The portfolio consists of seven operating wind farms installed between 2008 and 2011, as well as two wind farms currently under construction and expected to be commissioned this year. EDPR has not specified the names of the projects, but the company notes all of the wind farms have long-term off-take agreements in place.
The transaction is subject to regulatory approvals. The offer contemplates an initial funding to occur upon obtaining regulatory approvals and a final funding to occur upon achievement of commercial operations of the assets under construction.
Based on the transaction price and the expected tax equity liabilities of the projects, EDPR says the total enterprise value on the 1,101 MW portfolio amounts to $1.7 billion, translating to $1.54 million/MW. Including the cash and tax attributes received since the projects' inception, the total asset value of the portfolio sums to $2.55 billion, or $2.32 million/MW. EDPR says the 1,101 MW portfolio is expected to generate cash distributable to equity shareholders of about $40 million per annum in 2015 and 2016.
Furthermore, the company says this agreement makes EDPR well positioned to achieve its cumulative asset rotation target for the 2014-2017 period of EUR 700 million. The asset rotation strategy allows EDPR to crystallize the value of its projects' future cashflow stream and reinvest in the development of new projects, contributing to EDPR's self-funding growth strategy.