The 1.3GW unregulated, contracted renewables portfolio the consortium has acquired from American Electric Power (AEP) includes a total of 14 projects, comprising 1,200MW of wind and 165MW of solar projects located in 11 states
The consortium acquired the renewable assets from AEP. (Credit: PRNewswire/Invenergy)
IRG Acquisition Holdings, a consortium led by Invenergy, CDPQ and Blackstone Infrastructure, has completed the acquisition of a 1.3GW renewables portfolio from American Electric Power (AEP) for an enterprise value of $1.5bn.
AEP is a US-based electric utility that delivers electricity to customers in 11 states.
The renewables portfolio acquired by IRG includes 14 projects, comprising 1,200MW of wind and 165MW of solar projects across 11 states.
AEP has signed long-term power purchase agreements with other utilities, corporations and municipalities, for renewable power produced from the projects.
The US-based electric utility would receive a total of around $1.2bn in cash, net of taxes, transaction fees and other customary adjustments.
AEP president and CEO Julie Sloat said: “This sale is part of our strategy to streamline and de-risk the business and focus on our regulated operations.
“Over the next five years, we plan to invest nearly $40 billion primarily in our regulated wires and generation businesses.
“The proceeds from this sale will be used to continue to modernize the energy grid, shift to a more balanced generation portfolio and enhance service for our customers while strengthening our balance sheet.”
In February this year, AEP signed an agreement to sell the assets and secured the Federal Energy Regulatory Commission (FRC) approval.
The electric utility also secured the US Committee on Foreign Investment approval and other approvals under competition laws.
The consortium has secured a $580m PTC tax credit transfer commitment from Bank of America Securities, and committed financing from several banks, to support the acquisition.
It has received committed financing from Banco Santander, Coöperatieve Rabobank, Natixis CIB, Export Development Canada, Banco Bilbao Vizcaya Argentaria, Banco de Sabadell, Bayerische Landesbank, CaixaBank, MetLife, National Westminster Bank, among others.
Invenergy executive vice president and CFO Meghan Schultz said: “This transaction was the result of our innovative financing approach, the strength of our investor consortium, and our exceptional team who will integrate the projects into our portfolio in collaboration with our partners and service providers.
“Invenergy has industry-leading operations and asset management capabilities, and we look forward to applying our unmatched expertise to this portfolio of projects.”
JP Morgan served as a lead financial advisor, Citigroup Global Markets as a financial advisor, and Hunton Andrews Kurth as legal counsel to AEP, on the transaction.
Bank of America Securities served as transferability underwriter and placement agent and financial advisor, and Banco Santander as structuring agent, coordinating lead arranger, and co-green loan coordinator to IRG.
Also, Coöperatieve Rabobank served as coordinating lead arranger and due diligence bank, Natixis CIB as coordinating lead arranger and co-green loan coordinator, and Export Development Canada as coordinating lead arranger.