AEP to sell 1.3GW renewables portfolio to Invenergy/Blackstone partnership

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AEP has previously announced plans to invest approximately US$40 billion in its transmission wire and generation business. Image: Invenergy Renewables.

Energy utility American Electric Power (AEP) has agreed to a sale of its 1.3GW unregulated renewables portfolio for approximately US$1.5 billion including project debt, with a view to investing in its regulated wires and generation business.

The 1,365MW portfolio will be bought by IRG Acquisition Holdings, a partnership owned by Invenergy, CDPQ and funds managed by Blackstone Infrastructure. Blackstone invested US$3 billion in Invenergy last year to expand its renewables development capability.

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The deal is expected to close in Q2 2023, upon which AEP expects to take US$1.2 billion in cash after tax and other fees.

Included in the portfolio are 14 projects, constituting 156MW of solar PV and 1.2GW of wind assets across 11 US states which AEP says are accounted for in offtake agreements with other utilities, corporations and municipalities.

“We’re committed to derisking the company and prioritising 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 transaction is being serviced by JP Morgan, acting as lead financial advisor, and Citigroup Global Markets as financial advisor to AEP

In December AEP issued a request for proposals for offtake agreements for new and existing renewables projects in the PJM and ERCOT interconnection areas.

July saw a subsidiary of AEP, Southwestern Electric Power Company, acquire a solar project in Louisiana developed by Invenergy. AEP has previously stated its aim to add 30GW of renewable energy capacity to its portfolio by 2030.

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