CPPIB acquires NextEra’s Canadian renewable portfolio for $1.27B

Canada Pension Plan Investment Board (CPPIB) has entered into an agreement to acquire from NextEra Energy Partners, LP (NYSE: NEP) its portfolio of wind and solar generation assets located in Ontario for a total consideration of approximately US $582.3 million plus the assumption of approximately US $689 million in existing debt.

The transaction is expected to close during the second quarter of 2018.

An affiliate of NextEra Energy Resources will continue to operate all of the facilities included in the transaction under a 10-year services agreement with CPPIB.

NextEra Energy Canada began to actively develop renewable energy projects in Canada in 2006. NextEra Energy Canada is focused on future development in Ontario and other provinces.

photo credit: NextEra Energy Canada

News Release

NextEra Energy Partners, LP announces sale of Canadian renewable portfolio

JUNO BEACH, Fla., April 2, 2018 /PRNewswire/ — NextEra Energy Partners, LP (NYSE: NEP) today announced that it has entered into a definitive agreement with Canada Pension Plan Investment Board (CPPIB) for the sale of its portfolio of wind and solar generation assets located in Ontario, Canada, for a total consideration of approximately $582.3 million USD, including the net present value of the O&M origination fee, subject to customary working capital and other adjustments, plus the assumption by the purchaser of approximately $689 million USD in existing debt. An affiliate of NextEra Energy Resources will continue to operate all of the facilities included in the transaction under a 10-year services agreement with CPPIB.

“We are pleased to reach this agreement with CPPIB for the sale of our Canadian portfolio, which we expect will be accretive to NextEra Energy Partners’ long-term growth,” said Jim Robo, chairman and chief executive officer. “The sale of these assets, at a very attractive 10-year average CAFD yield of 6.6 percent, including the present value of the O&M origination fee, highlights the underlying strength of the partnership’s renewable portfolio. As discussed during our earnings call in January, we expect the sale of the Canadian portfolio to enable us to recycle capital back into U.S. assets, which benefit from a longer federal income tax shield and a lower effective corporate tax rate, allowing NextEra Energy Partners to retain more CAFD in the future for every $1 invested. We expect to accretively redeploy the proceeds from this transaction to acquire higher-yielding U.S. assets from either third parties or NextEra Energy Resources.”

The transaction includes the sale of six fully contracted wind and solar assets, with an average contract life of approximately 16 years and 10-year average CAFD of $38.4 million USD. Located in Ontario, the portfolio has a combined total generating capacity of approximately 396 megawatts (MW) and consists of:

Bluewater, a 59.9-MW wind generating facility; Conestogo, a 22.9-MW wind generating facility; Jericho, a 149-MW wind generating facility; Summerhaven, a 124.4-MW wind generating facility; Moore, a 20-MW solar energy generating facility; and Sombra, a 20-MW solar energy generating facility.

NextEra Energy Partners expects the sale to close during the second quarter of 2018. The transaction is subject to receipt of regulatory approvals and satisfaction of customary closing conditions.

NextEra Energy Partners continues to expect a Dec. 31, 2018, run rate for adjusted EBITDA of $1.00 billion to $1.15 billion and CAFD of $360 million to $400 million, reflecting calendar year 2019 expectations for the forecasted portfolio at year-end 2018.

Citi and CIBC Capital Markets are serving as financial advisors to NextEra Energy, and McCarthy Tétrault LLP and Gowling WLG (Canada) LLP are legal counsel.

NextEra Energy Partners, LP
NextEra Energy Partners, LP (NYSE: NEP) is a growth-oriented limited partnership formed by NextEra Energy, Inc. (NYSE: NEE). NextEra Energy Partners acquires, manages and owns contracted clean energy projects with stable, long-term cash flows. Headquartered in Juno Beach, Florida, NextEra Energy Partners owns interests in wind and solar projects in North America, as well as natural gas infrastructure assets in Texas. The renewable energy projects are fully contracted, use industry-leading technology and are located in regions that are favorable for generating energy from the wind and sun. The seven natural gas pipelines in the portfolio are all strategically located, serving power producers and municipalities in South Texas, processing plants and producers in the Eagle Ford Shale, and commercial and industrial customers in the Houston area. The NET Mexico Pipeline, the largest pipeline in the portfolio, provides a critical source of natural gas transportation for low-cost, U.S.-sourced shale gas to Mexico. For more information about NextEra Energy Partners, please visit: www.NextEraEnergyPartners.com.