KKR, a global investment firm, has signed agreements with NextEra Energy Resources LLC, a subsidiary of NextEra Energy Inc., and NextEra Energy Partners LP relating to two separate transactions to acquire equity interests in portfolios of contracted utility-scale wind and solar assets.
KKR will invest approximately $1.4 billion in total in the two transactions for interests in 1,625 MW of renewable energy assets. This includes an approximately $300 million direct equity purchase from NextEra Energy Resources for a 50% interest in a 1,000 MW portfolio, and, separately, a $1.1 billion convertible equity portfolio financing agreement with NextEra Energy Partners for an interest in a 1,125 net MW portfolio.
KKR has also signed a letter of intent with NextEra Energy Partners to invest approximately $900 million in future renewable energy transactions to provide access to capital for future growth.
“We are pleased to participate in this landmark transaction to acquire contracted, highly diversified renewable energy assets and support the future growth of NextEra Energy,” says Brandon Freiman, head of North American infrastructure at KKR. “We have built a strong relationship with the NextEra Energy Partners team through our two prior transactions and we are proud to support the development of future clean energy projects while delivering attractive exposure for our investors to core infrastructure assets.”
The assets in the portfolios consist of 12 distinct operating utility-scale wind and solar assets in geographically diverse locations throughout the U.S. The assets have approximately 19 years of remaining weighted average power purchase agreement (PPA) duration contracted with investment-grade counterparties. The equity financing KKR is providing NextEra Energy Partners to fund this transaction will grow the portfolio of jointly-owned renewable generation assets to over 2.3 GW, further deepening the alignment of interests between both parties. NextEra Energy Resources’s retained interest in the assets also provides alignment of interests with KKR. Affiliates of NextEra Energy will continue to operate, maintain and manage the facilities on behalf of the partners.
KKR will make the investment through its core infrastructure strategy, as well as with participation by Healthcare of Ontario Pension Plan (HOOPP Infrastructure), the CAAT Pension Plan and Varma Mutual Pension Insurance Co. KKR has a decade of experience investing in renewable energy, with significant capital deployed in renewable assets including more than 10.5 GW of installed renewable capacity.