NRG Yield (NYSE:NYLD, NYLD.A) announced Sept. 18 that it has entered into an agreement with NRG Energy (NYSE: NRG) to acquire 75% of the equity interests in a portfolio of wind projects consisting primarily of assets acquired by NRG from Edison Mission Energy in April 2014.
This buy is for $210 million in total cash consideration, subject to working capital adjustments, plus assumed project debt of about $145 million and tax equity of approximately $97 million (as of Aug. 1, 2015 on a pro rata basis).
The EME Wind Portfolio includes the following assets, representing about 814 MW (net) of total operating capacity:
- Elkhorn Ridge – 54 MW wind facility located in Bloomfield, NE
- San Juan Mesa – 90 MW wind facility located in Elida, NM
- Wildorado – 161 MW wind facility located in Vega, TX
- Crosswinds – 21 MW wind facility located in Ayrshire, IA
- Forward – 29 MW wind facility located in Berlin, PA
- Hardin – 15 MW wind facility located in Jefferson, IA
- Odin – 20 MW wind facility located in Odin, MN
- Sleeping Bear – 95 MW wind facility located in Woodward, OK
- Spanish Fork – 19 MW wind facility located in Spanish Fork, UT
- Lookout – 38 MW wind facility located in Berlin, PA
- Goat Wind – 150 MW wind facility located in Sterling City, TX
- Elbow Creek – 122 MW wind facility located in Howard County, TX
NRG Yield expects these assets to deliver approximately $41 million of Adjusted EBITDA and $21 million of cash available for distribution (CAFD) on a run-rate basis and provide incremental geographical and counterparty diversification. At closing, the portfolio is expected to have an average contracted life of approximately 11 years and an average offtaker credit rating of A3. The transaction is expected to close in the fourth quarter, subject to receipt of third party consents and other closing conditions.
“NRG Yield continues to remain tactically vital to NRG’s long-term contracted growth strategy. With this fourth drop-down transaction from NRG Energy, we continue to deliver on NRG Yield’s growth strategy and to prove the symbiotic relationship between the two entities,” said David Crane, NRG Yield’s Chairman and Chief Executive Officer.
NRG Yield owns a diversified portfolio of contracted renewable and conventional generation and thermal infrastructure assets in the U.S., including fossil fuel, solar and wind power generation facilities that provide the capacity to support more than one million American homes and businesses.