Brookfield Renewable Energy Partners L.P. (Brookfield Renewable) announced that it has agreed, in two separate unrelated transactions, to acquire a 70MW hydroelectric portfolio in Maine, and the remaining 50% interest in its 30MW Malacha Hydro facility in California.
Both transactions will be pursued with Brookfield Renewable’s institutional partners.
The Maine portfolio being acquired from affiliates of ArcLight Capital Partners, LLC, consists of nine hydroelectric facilities on the Penobscot, Androscoggin and Union rivers, and provides Brookfield Renewable with a strong fit with its existing 270MW of operating capacity on the same river systems.
The facilities have average expected generation of approximately 375,000MWh annually and approximately 60% of the portfolio’s output is currently sold into the New England wholesale power market, with the remainder sold under long-term contract to local utilities until 2024 and 2028. The portfolio benefits from long-term FERC licenses, in most cases expiring after 2029.
Brookfield Renewable and its partners have also agreed to acquire the remaining 50% interest in the 30MW Malacha Hydro peaking facility on the Pit River in Lassen County, California. Brookfield Renewable acquired its initial operating interest in December 2010.
All of Malacha Hydro’s output is sold under a fixed-price contract to Pacific Gas and Electric Company until 2028 with a natural gas indexed energy price component starting in 2017.
"These hydroelectric facilities are highly complementary to our existing portfolio in North America," said Richard Legault, President and CEO of Brookfield Renewable. "We continue to add high quality assets in this low-price environment, which provide an attractive combination of stable, contracted revenues and strong prospects for long-term cash flow growth. Moreover, we are pleased to continue to invest in Maine and California, both important markets for us. Our knowledge of hydro and our operating expertise in these markets give us confidence in the long-term value creation potential of this portfolio."
The acquisitions will be funded through available liquidity and available capital from Brookfield Renewable’s institutional partners. It is expected that a portion of the purchase price will be funded with non-recourse, fixed-rate debt. The transactions are subject to regulatory approvals and other customary closing conditions and are expected to close before the end of 2013.