NextEra Energy Partners LP (NEP), a renewables spin-off of NextEra Energy Inc., has entered into agreements for two project acquisitions with indirect subsidiaries of its parent company. When completed, the acquisitions will expand NEP's portfolio to approximately 1,260 MW of contracted clean energy projects.
NEP has signed up to acquire the approximately 250 MW Palo Duro wind farm, which is currently under construction in Hansford and Ochiltree counties, Texas. The project consists of 147 GE 1.7-MW wind turbines and is expected to begin commercial operation in the fourth quarter of this year. Palo Duro will sell all of its output under a 20-year power purchase agreement (PPA).
Furthermore, NEP will acquire the 20 MW Shafter solar project, which is included in the company's right-of-first-offer portfolio. Located in Kern County, Calif., the project is expected to begin construction in November, with commercial operation slated for the second quarter of 2015. Shafter will sell all of its output under a 20-year PPA.
NEP says it expects to acquire both projects in the first quarter of 2015 for total consideration of approximately $291 million, plus the assumption of approximately $250 million in tax equity financing, which is expected to close in December 2014 for Palo Duro, and subject to working capital adjustments. NEP plans to finance the acquisitions through cash on hand, cash retained from operations and the utilization its revolving credit facility.
‘We are pleased today to announce two asset acquisitions that affirm the excellent growth opportunities and strategic optionality related to the right-of-first-offer portfolio, as well as other assets developed by our sponsor, NextEra Energy Resources," comments Jim Robo, chairman and CEO of NEP. "There remains significant potential for new renewables development in North America, which could provide more opportunities for growth for NextEra Energy Partners over the long term.’