NRG Yield, a yieldco company divided from NRG Energy Inc. to own, operate and acquire contracted renewable and conventional generation assets, has agreed to acquire 75% of the equity interest in a portfolio of wind projects from NRG. The “EME Wind Portfolio” consists of 12 wind projects, totaling 814MW of operating capacity.
NRG acquired the EME Wind Portfolio from Edison Mission Energy in April 2014 for US$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). After completing the transaction, NRG Yield 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 counterparty diversification. At closing, the portfolio is expected to have an average contracted life of approximately 11 years and an average offtaker credit rating of A33. The transaction is expected to close in the fourth quarter, subject to receipt of third party consents and other closing conditions.
“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.
NRG Yield 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.