NRG sells yieldco, renewables platform to GIP

One of the company's existing sites in Freetown, Mass. (Photo: Business Wire)

February 7 (Renewables Now) - US power company NRG Energy Inc (NYSE:NRG) said today it has signed a deal to sell its stake in NRG Yield Inc (NYSE:NYLD.A) and its renewables platform to Global Infrastructure Partners (GIP) for USD 1.375 billion (EUR 1.12bn) in cash.

NRG Energy has been seeking to dispose of 50% to 100% of its interest in the yieldco and the latter's renewables platform as part of a transformation plan, announced in July last year.

GIB is buying NRG's controlling stake and 46% economic interest in NRG Yield. With NRG's renewable energy development and operations platform, the infrastructure fund is acquiring a pipeline of over 6.4 GW of backlog and development projects, and operational oversight of 2.4 GW across 17 states. "We view each of the three acquired businesses – the NYLD stake, the O&M business, and the development business – as highly complementary and well positioned to capitalize on the increasing market demand for low cost, clean energy," said Adebayo Ogunlesi, GIP chairman and managing partner.

NRG Yield is the largest US power yieldco in terms of installed capacity with 5.1 GW across wind, solar, and natural gas technologies, GIB said. It also owns thermal infrastructure assets.

NRG also announced accelerated drop downs to NRG Yield of two Right of First Offer (ROFO) assets -- the 527-MW Carlsbad Energy Centre and 154-MW Buckthorn Solar park. NRG Yield is buying NRG's interest in these assets for additional cash proceeds of USD 407 million. The ROFO agreement, meanwhile, will be amended to remove the Ivanpah concentrating solar power (CSP) facility.  

The deal is expected to close in the second half of 2018, subject to a number of closing conditions and approvals. Once it is finalised, NRG Yield said it will enter into a new ROFO agreement with GIP that adds the operational 150-MW Langford Wind project and the under-development 400-MW Mesquite Star Wind project to the current pipeline.

NRG announced the disposal along with the sale of its South Central business to Cleco Corporate Holdings LLC. According to president and chief executive Mauricio Gutierrez, the sale processes were rigorous and very competitive.

NRG Yield is the third yieldco deal this week after on Monday it was announced that Capital Dynamics has agreed to acquire 8point3 Energy Partners LP (NASDAQ:CAFD), the solar yieldco owned by SunPower Corp (NASDAQ:SPWR) and First Solar Inc (NASDAQ:FSLR), and today TerraForm Power Inc (NASDAQ:TERP) said it has launched a USD-1.2-billion takeover bid for Spanish firm Saeta Yield SA (BME:SAY).

(USD 1 = EUR 0.811)  

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Plamena has been a UK-focused reporter for many years. As part of the Renewables Now team she is taking a keen interest in policy moves.

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