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RWE to sell its stake in Texan wind farms

Published by , Editorial Assistant
Energy Global,


RWE, a renewable energy company, has signed an agreement with a subsidiary of Algonquin Power & Utilities Corp (Algonquin) to sell a 51% stake in four RWE onshore wind facilities in Texas, US, accounting for a total pro-rata installed capacity of 439 MW.

The total consideration corresponds to an enterprise value of approximately US$600 million (for the 51% stake), which translates to an implied enterprise value multiple of US$1.4 million/MW. Two projects are in operation and two are under construction. The disposal is part of RWE’s capital rotation programme and the proceeds will be used to finance further growth in the renewable energy business.

Algonquin is a diversified Canadian utility with assets across the US and Canada, with a market capitalisation of approximately US$10 billion. The US play an important role in RWE’s strategy to grow its renewables business and to become carbon neutral by 2040. RWE constructs, owns and operates wind, solar and energy storage projects in the US, with 25 onshore wind farms currently in operation. In addition, the company has almost 1 GW of onshore wind farms under construction in the US, and is building the Hickory Park solar project with co-located storage.

The four onshore wind farms for which the parties agreed to enter a partnership are Stella, Cranell, as well as East and West Raymond. With a total installed capacity of 861 MW, they are located in the coastal region of south Texas. Stella Wind Farm (201 MW) was commissioned in December 2018 and Cranell Wind Farm (220 MW) in September 2020. Raymond East (200 MW) and West (240 MW) wind farms are currently under construction. They are expected to be commissioned by the end of 2020 and in 1Q2021, respectively. Following the closing of the transaction, RWE will continue to operate all four wind farms.

The announcement of this transaction with Algonquin does not change RWE’s financial guidance or its ambitions for investment and growth in the renewable energy business: by the end of 2022, the company aims to expand its renewables portfolio to more than 13 GW capacity by investing €5 billion net. Together with partners, the gross investment volume can amount to up to €9 billion. To achieve its growth targets, RWE has a project development pipeline of more than 22 GW, across all of the company’s strategic core regions.

The transaction is expected to close in 1Q2021 and is subject to the commissioning of the projects under construction.

 

 

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Read the article online at: https://www.energyglobal.com/special-reports/16122020/rwe-to-sell-its-stake-in-texan-wind-farms/

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