The yield co subsidiary of leading US renewables generator, NextEra Energy, has raised almost US$450 million in an initial public offering (IPO).
Announcing the closure of the IPO yesterday, NextEra Energy Partners said the offering had raised some US$442.7 million, through the sale of 16.25 million shares.
NextEra Energy Partners’ initial portfolio will contain 10 solar and wind power plants totalling around 1GW, according to the yield co’s registration document filed with the US Securities and Exchange Commission in April.
Yield cos are emerging as a popular new investment vehicle among renewable energy players. Developers set them up as spin-off businesses that own and operate power plants, offering companies access to low-cost capital through IPOs and attractive cash dividends to investors.
According to a briefing note from Deutsche Bank analyst Vishal Shah last month, yield co activity is expected to pick up in the coming months, as investor interest in the model grows.
US PV energy provider SunEdison was one of the first companies in the solar sector to set up a yield co, but Shah said a “robust pipeline” of yield co IPOs was now emerging among solar companies looking to fund downstream activities.