Invenergy, CDPQ and Blackstone Infrastructure have teamed up to acquire American Electric Power’s (AEP) 1.37GW unregulated, contracted renewables portfolio at a $1.5 billion enterprise value, including project debt.
The sale to the three investors' vehicle, IRG Acquisition Holdings, is expected to close in the second quarter of 2023.
AEP put its unregulated renewables on the block in February 2022 before launching a competitive bidding process in August. The firm said it would reinvest in its regulated renewables and transmission businesses instead. AEP expects to net approximately $1.2 billion in cash after taxes, transaction fees and other customary adjustments.
"We're committed to de-risking the company and prioritizing investments in our core regulated businesses. The proceeds from the sale will be directed to the significant pipeline of opportunities we have to enhance service for customers across our footprint and advance our clean energy transition," said Julie Sloat, AEP president and chief executive officer.
The portfolio includes 14 projects in 11 states, and comprises 1,200MW of wind generation and 165MW of solar projects. The renewable power generated by these projects is contracted under long-term agreements with various utilities, corporations and municipalities.
“Invenergy is proud to bring our industry-leading development, financial, and operating expertise to this quality renewable operating portfolio,” said Jim Murphy, president and corporate business leader at Invenergy. “Our longstanding record of working with AEP, familiarity with the portfolio projects, and the strength and cohesiveness of our investor consortium led to this significant agreement.”
JP Morgan is serving as lead financial advisor and Citigroup Global Markets is serving as financial advisor to AEP for this transaction. Hunton Andrews Kurth is serving as legal counsel to AEP.
The buyers secured committed financing to support this acquisition from Banco Santander, which will act as structuring agent, coordinating lead arranger and co-green loan coordinator, Coöperatieve Rabobank, which will act as coordinating lead arranger and due diligence bank, and Natixis, which will act as coordinating lead arranger and co-green loan coordinator.
BofA Securities is serving as financial advisor to the consortium for this transaction. Norton Rose Fulbright is legal counsel to IRG.