AES and Alberta Investment Management (AIMCo) have entered into an agreement to acquire FTP Power (sPower) for $1.58bn from Fir Tree Partners.

The transaction amount includes $853m in cash, along with an assumption of $724m in non-recourse debt. sPower owns and operates utility and commercial scale renewable energy generation sources across several states in the US.

As per the terms of the agreement, AES and AIMCo will each independently own a stake of just under 50% in sPower.

Currently, sPower has a portfolio of about 1.2GW of solar plants and wind farms, which are either operational or under construction.

AES president and CEO Andrés Gluski said: "sPower not only brings 1.3 GW of installed capacity with an average remaining contract life of more than 20 years, but a first class management and development team with a pipeline of more than 10 GW of projects.”

The company's projects under construction and its operating assets are under long term power purchase agreements (PPAs) with an average remaining life of 21 years.

The acquisition is expected to enable AES to grow its renewable energy projects in operation and under construction from 8.2GW to 9.5GW. 

Subject to approval from the Federal Energy Regulatory Commission, the Committee on Foreign Investment in the US and the expiration or termination of any waiting period under the Hart-Scott-Rodino Act, the transaction is expected to close by the third quarter of 2017.

AIMCo CEO Kevin Uebelein said: “sPower is an impressive organization that has and continues to successfully develop and execute a robust renewable energy development pipeline, delivering value to all of its many stakeholders. Our partner, AES, is a world class leader in sustainable energy and we are delighted to be working with them.”

sPower board chairman and Fir Tree Partners founder Jeffrey Tannenbaum said: “It is extremely rewarding to realize Fir Tree’s vision for sPower with this agreement between our company and AES and AIMCo.

“sPower’s innovation and significant commercial success in just three years is testament to its outstanding management team and demonstrates that clean energy is a strong and profitable tool for driving economic growth and meaningful job creation for skilled workers."

Image: sPower to be acquired by AES and AIMCo. Photo: Courtesy of khunaspix/