Canada Pension Plan buys wind power projects

U.S.-based NextEra reaps cash for valuable “guaranteed price” Ontario wind contracts as the CPP pays millions and even assumes almost $1B in debt

April 3, 2018

Florida-based NextEra Energy has sold off a significant portion of its Ontario renewable power portfolio to the Canada Pension Plan in a deal that nets the company over $700 million CAD in cash, and also sees the Canadian public pension plan assume debt of almost $900 million.

Here is a report from wind industry publication, Windpower Engineering and Development. The Canadian Pension Plan also released the information here.

NextEra selling Ontario wind & solar assets

NextEra Energy Partners, LP announced that it has entered into a definitive agreement with Canada Pension Plan Investment Board (CPPIB) for the sale of its portfolio of wind and solar generation assets in Ontario, Canada, for a total consideration of about $582.3 million. This includes the net present value of the O&M origination fee, subject to customary working capital and other adjustments, plus the assumption by the purchaser of approximately $689 million USD in existing debt.

Wind turbines

The transaction includes the sale of six fully contracted wind and solar assets with an average contract life of about 16 years.

“We are pleased to reach this agreement with CPPIB for the sale of our Canadian portfolio, which we expect will be accretive to NextEra Energy Partners’ long-term growth,” said Jim Robo, chairman and chief executive officer. “The sale of these assets, at a very attractive 10-year average CAFD yield of 6.6%, including the present value of the O&M origination fee, highlights the underlying strength of the partnership’s renewable portfolio.”

 

 

An affiliate of NextEra Energy Resources will continue to operate all of the facilities included in the transaction under a 10-year services agreement with CPPIB.

“As discussed during our earnings call in January, we expect the sale of the Canadian portfolio to enable us to recycle capital back into U.S. assets, which benefit from a longer federal income tax shield and a lower effective corporate tax rate, allowing NextEra Energy Partners to retain more CAFD in the future for every $1 invested. We expect to accretively redeploy the proceeds from this transaction to acquire higher-yielding U.S. assets from either third parties or NextEra Energy Resources,” added Robo.

The transaction includes the sale of six fully contracted wind and solar assets, with an average contract life of approximately 16 years and 10-year average CAFD of $38.4 million. Located in Ontario, the portfolio has a combined total generating capacity of approximately 396 MW and consists of:

  • Bluewater, a 59.9-MW wind generating facility;
  • Conestogo, a 22.9-MW wind generating facility;
  • Jericho, a 149-MW wind generating facility;
  • Summerhaven, a 124.4-MW wind generating facility;
  • Moore, a 20-MW solar energy generating facility; and
  • Sombra, a 20-MW solar energy generating facility.

NextEra Energy Partners expects the sale to close during the second quarter of 2018. The transaction is subject to receipt of regulatory approvals and satisfaction of customary closing conditions.

Comments

Andre Lauzon
Reply

This smells very bad……………..

Lisa Carney
Reply

Can it get any worse??

Barbara
Reply

People get what they vote for?

N. M. DeHaan
Reply

What a deal for them. Win/Win! The Ontario taxpayers are again digging into their own pockets for this deal, its like buying into the projects twice. There is no way now ever that our government can cancel contracts because the loss would be to our own Canada Pension. Next Era wins again, and again, and again………..

Doug Corner
Reply

This no doubt has the federal Liberal puppet master Gerry Butts fingerprints all over it. First, he was key to the disastrous Green Energy act in Ontario and probably had contacts within NextEra. Then when NextEra went looking for a dupe (err.. buyer) they asked Butts to help. Butts saw an opportunity to make it extremely hard for the hopefully new Conservative government in Ontario to deal with the hated and unwanted wind/solar contracts, because.. we now own them ourselves. Hahaha. Nothing to do with economics yet again.

Sommer
Reply

Take a look at this investment company’s website:
http://www.coolfuturesfundsmanagement.com
They understand the anthropomorphic climate change deception that was used as a rationale for industrial scale wind.

Leave a comment

name*

email* (not published)

website