Global investor KKR has acquired 50% of a 1.4GW solar portfolio in North American from French oil major TotalEnergies.
The transaction values the portfolio at US$1.25 billion, with TotalEnergies to receive US$950 million at the deal’s close. The oil major will continue to own the remaining 50% of the projects, and continue to operate them one the deal has cleared customary conditions.
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The portfolio comprises six utility-scale solar assets, with a combined capacity of 1.3GW, and 41 distributed generation assets, with a combined capacity of 140MW, the majority of which are located in the US. The electricity generated at these project will also be sold to “third parties” or used by TotalEnergies.
While TotalEnergies still has 8.6GW of renewable energy generation capacity across solar, wind and storage projects following the sale, the deal follows fellow oil major bp’s divestment of its solar developer, Lightsource bp. Earlier this year, bp announced plans to cut renewable energy spending by around US$5 billion a year, to between US$1.5-2 billion, while increasing annual oil and gas spending by around US$10 billion a year.
While this deal could reflect increasing uncertainty over the profitability of renewable power generation in the US at present, it could also reflect KKR’s ongoing interest in expanding its renewable portfolio around the world. In July, the company invested over US$300 million into distributed solar projects in Australia, and acquired German independent power producer (IPP) Encavis last November.
“TotalEnergies is a renewable energy industry leader globally, and we are thrilled to establish this joint venture with the TotalEnergies team to support their renewables business”, said Cecilio Velasco, KKR managing director. “TotalEnergies’ North American solar portfolio is a great fit for us, representing high-quality renewable energy assets with long term contracts.”
