NRG Yield, Inc. has entered into an agreement with NRG to acquire 75% of the equity interests in a portfolio of wind projects. The projects primarily consist of assets acquired by NRG from Edison Mission Energy in April 2014 (EME Wind Portfolio) for $210 million in total cash consideration, subject to working capital adjustments, plus assumed project debt of approximately $145 million, and tax equity of approximately $97 million (as of August 1, 2015 on a pro rata basis).
The EME Wind Portfolio includes the following assets, representing approximately 814 net megawatts of total operating capacity:
- Elkhorn Ridge – 54-MW wind facility located in Bloomfield, NE
- San Juan Mesa – 90-MW wind facility located in Elida, NM
- Wildorado – 161-MW wind facility located in Vega, TX
- Crosswinds – 21-MW wind facility located in Ayrshire, IA
- Forward – 29-MW wind facility located in Berlin, PA
- Hardin – 15-MW wind facility located in Jefferson, IA
- Odin – 20-MW wind facility located in Odin, MN
- Sleeping Bear – 95-MW wind facility located in Woodward, OK
- Spanish Fork – 19-MW wind facility located in Spanish Fork, UT
- Lookout – 38-MW wind facility located in Berlin, PA
- Goat Wind – 150-MW wind facility located in Sterling City, TX
- Elbow Creek – 122-MW wind facility located in Howard County, TX
The company expects these assets to deliver approximately $41 million of Adjusted EBITDA and $21 million of cash available for distribution (CAFD) on a run-rate basis* and provide incremental geographical and counter-party diversification. At closing, the portfolio is expected to have an average contracted life of approximately 11 years (CAFD-weighted per project), and an average offtaker credit rating of A3. The transaction is expected to close in the fourth quarter, subject to receipt of third party consents and other closing conditions.
The company is also reaffirming third quarter and full year guidance for 2015 and continues to have the ability to deliver a target 15% dividend per share growth through 2018, which is not dependent on access to the equity capital markets.
“NRG Yield continues to remain tactically vital to NRG’s long-term contracted growth strategy. With this fourth drop-down transaction from NRG Energy, we continue to deliver on NRG Yield’s growth strategy and to prove the symbiotic relationship between the two entities,” said David Crane, NRG Yield’s Chairman and Chief Executive Officer.
* Reflects 75% equity interest acquired by NYLD; based on average Adjusted EBITDA and CAFD over the remaining expected life of the portfolio based on P50 production scenario