NextEra Energy Partners acquires Brookfield Renewable wind portfolio
NextEra Energy Partners (NYSE: NEP) has agreed to acquire a portfolio of US onshore wind assets from Brookfield Renewable Power (NYSE: BEP)(NYSE: BEPC) for $ 733 million. The transaction will enhance NextEra Energy’s growth strategy while allowing Brookfield Renewable to recycle capital into higher yielding opportunities.
NextEra Energy Partners purchases three wind power plants in California and one in New Hampshire with a capacity of 391 megawatts. Brookfield has long-term power purchase agreements with high quality customers for almost all of the power produced by these wind farms. For this reason, NextEra has great visibility on its future cash flows. This leads him to believe that they will contribute an average of $ 63 million to $ 70 million. EBITDA and cash available for distribution (CAFD) over the next five years.
The transaction achieves several objectives for NextEra Energy Partners. It will enable the company to deliver Adjusted EBITDA and CAFD upwards of its forecast ranges in 2021. It will strengthen its long-term strategy of growing its dividend from 12% to 15% per year through 2024. And this is another demonstration of its ability to secure third-party acquisitions so that it does not depend entirely on its parent company, the utility NextEra Energy (NYSE: NEE), to achieve its dividend growth strategy.
At the same time, the transaction will improve Brookfield Renewable’s balance sheet in the short term, giving it additional flexibility to make higher-yielding investments when opportunities arise. This is the company second wind asset sale this month, because it continues to recycle capital from wind power to solar energy, where he sees a better future. This strategy supports Brookfield’s view that it can increase its cash flow at an annual rate of more than 10% through 2025 while increasing its dividend from 5% to 9% annually.
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