Enbridge Inc. has entered into agreements with the Canada Pension Plan Investment Board (CPPIB) to monetize a 49% interest in select North American onshore renewable power assets, as well as 49% of Enbridge’s interests in two German offshore wind projects (HoHe See and its expansion), for approximately C$1.75 billion.
The assets being contributed by Enbridge to the newly created joint venture with CPPIB include all of Enbridge’s Canadian renewable power assets, held through Enbridge Income Fund, as well as two U.S. assets: the Cedar Point Wind Farm in Colorado and the Silver State North Solar Project in Nevada. Enbridge expects to retain its interests in certain other U.S. renewable power assets, which may be monetized or sold at a later date.
Under the terms of the agreements, CPPIB will fund its 49% pro-rata share of the remaining construction capital required to complete the Hohe See projects, which are scheduled to come into service at the start of 2020. This additional capital commitment is estimated at approximately C$0.5 billion, bringing CPPIB’s total commitment to approximately C$2.25 billion.
Enbridge and its affiliates will continue to manage, operate and provide administrative services for the renewable power assets.
Further, Enbridge and CPPIB have entered into an agreement whereby the two parties will form a 50/50 joint venture for the pursuit of future European offshore wind projects. These projects may be in the early development, late development, construction or operational phase.
Each of the North American and German sale agreements is subject to closing adjustments and conditions customary in transactions of this nature. Closing is expected to occur during the third quarter of this year, subject to the receipt of all necessary regulatory approvals and consents. Enbridge anticipates a minimal amount of cash taxes arising from the sale of these renewable assets.
CIBC Capital Markets acted as exclusive financial advisor and Dentons acted as exclusive legal adviser to Enbridge.
