Dive Brief:
- Duke Energy announced Thursday it has reached a deal to sell a minority interest in a portion of its commercial renewable energy portfolio, helping to fund capital plans and reduce future debt issuance needs.
- The assets, owned and operated by Duke Energy Renewables and with an enterprise value of approximately $1.25 billion, will be sold to John Hancock Infrastructure Fund (JHIF) and John Hancock Life Insurance Co., both divisions of Manulife Financial.
- The deal includes 49% of 37 operating wind, solar and battery storage assets, and 33% of 11 operating solar assets across the U.S. In total, John Hancock's interest will be approximately 1.2 GW of generating capacity.
Dive Insight:
Duke says the deal, expected to close in the second half of this year, is a validation of its renewables portfolio and a financial win for the company, but does little to change daily operations.
The sale will provide Duke with pre-tax proceeds of $415 million, while allowing the company to retain the majority of the remaining tax benefits from the projects.
"We will continue to develop projects, grow our portfolio and maintain overall operational responsibilities for the projects just as we do today," Rob Caldwell, president of Duke Energy Renewables, said in a statement.
Duke Energy Renewables says it has completed more than 99 projects in 17 states, for a total of almost 3 GW of renewable capacity.
Under terms of the deal, John Hancock will also have the right to acquire a minority interest in additional wind and solar projects in the future, which Duke said would provide it a potential source of future growth capital. JHIF is an infrastructure-focused private equity fund with approximately $2 billion of committed capital.
The Federal Energy Regulatory Commission must approve the deal, along with the Public Utility Commission of Texas and the Committee on Foreign Investment in the United States.
