Duke Energy announced that it has entered into a definitive agreement to sell a minority interest in a portion of its commercial renewable energy portfolio owned and operated by its affiliate, Duke Energy Renewables, to the John Hancock Infrastructure Fund (JHIF) and John Hancock Life Insurance Company (collectively, “John Hancock”), a division of Manulife Financial Corporation.
“We look forward to working alongside John Hancock as we continue providing clean and affordable energy to our customers across the country,” said Rob Caldwell, president of Duke Energy Renewables. “We will continue to develop projects, grow our portfolio and maintain overall operational responsibilities for the projects just as we do today.”
The total enterprise value of this portion of Duke Energy’s commercial renewable energy portfolio is approximately $1.25 billion (including proportional existing project-level debt). The sale will result in pre-tax proceeds to Duke Energy of $415 million. As majority owner, Duke Energy remains committed to growing its commercial renewable energy business. The transaction will help fund the company’s future growth capital plans with proceeds used to reduce future debt issuance needs. Duke Energy will retain the majority of the remaining tax benefits from the projects.
The portion of Duke Energy’s commercial renewables energy portfolio to be sold includes 49% of 37 operating wind, solar, and battery storage assets and 33% of 11 operating solar assets across the U.S. Once the sale has closed, John Hancock’s interest will represent approximately 1.2 gigawatts of generating capacity.
John Hancock will also have the right to acquire a minority interest in certain additional wind and solar projects in the future, providing a potential source of future growth capital to Duke Energy. The sale is also subject to customary closing conditions, including approvals from the Federal Energy Regulatory Commission, the Public Utility Commission of Texas, and the Committee on Foreign Investment in the United States. The transaction is expected to close in the second half of 2019.
“John Hancock’s investment offers clear validation of the strength of our existing portfolio, and this partnership provides an opportunity for ongoing collaboration and investment as we deliver long-term value to our customers and investors,” said Caldwell.
JHIF, an infrastructure-focused private equity fund with approximately $2 billion of committed capital, is managed by John Hancock’s Infrastructure team, and is part of Manulife Private Markets.
“We are excited to partner with a leading, strategic owner and operator such as Duke Energy in a high-quality renewable energy portfolio,” said Recep Kendircioglu, Portfolio Manager of JHIF and Head of John Hancock’s Infrastructure Investments. “This partnership exemplifies a key component of our investment strategy and represents an attractive opportunity to deploy capital in the renewable energy sector.”