Canada Pension Plan Investment Board (CPPIB) has announced that it has signed an agreement to acquire a portfolio of six Canadian operating wind and solar power projects from NextEra Energy Partners, LP for $741 million, inclusive of working capital and subject to customary adjustments.
“This opportunity to acquire a sizeable portfolio of operating renewables projects provides immediate scale and exposure to a core sector for CPPIB’s broader North American and global power and renewables strategy,” said Bruce Hogg, managing director, head of power and renewables, CPPIB.
The portfolio includes four wind and two solar projects with a total capacity of 396 megawatts in Ontario. Affiliates of NextEra Energy Partners, who developed and currently operate the portfolio, will continue to be the operator under a long-term agreement. The fully contracted portfolio has delivered strong performance since the assets began operations between 2012-2015.
This transaction is valued at approximately 10 times EBITDA and a 10 per cent cash yield, based on 2019 estimates.
The announcement represents CPPIB’s third significant investment in the global renewables sector. “Since December 2017, CPPIB has committed to wind and solar investments in Brazil, India, and now Canada. As power demand grows worldwide and with a focus on accelerating the energy transition, we will continue to seek opportunities to expand our power and renewables portfolio globally,” said Hogg.
The transaction is subject to customary regulatory approvals and closing conditions and is expected to close during the second quarter of 2018.