TerraForm Power to buy 320-MW DG portfolio from AltaGas

Solar array. Author: Som Energia Cooperativa. License: Attribution 2.0 Generic.

July 22 (Renewables Now) - TerraForm Power Inc (NASDAQ:TERP) has inked a deal to buy a roughly 320-MW portfolio of distributed generation (DG) assets in the US from AltaGas Ltd (TSE:ALA) for a total purchase price of USD 720 million (EUR 642m).

The DG platform being sold by AltaGas’ subsidiaries WGL Energy Systems Inc and WGSW Inc includes 291 MW of commercial and industrial solar assets, about 21 MW of residential solar systems and some 10 MW of fuel cells. These assets are located in 20 states and in the District of Columbia, and have power purchase agreements (PPAs) with an average remaining term of over 17 years.

TerraForm Power said that this move will grow its own DG portfolio to about 750 MW. It intends to eventually finance its equity investment through project-level debt and the sale of minority interests worth USD 245 million in stabilised wind assets with a limited opportunity to add additional value going forward. Initially, the company will fund the acquisition with a USD-475-million bridge facility and draws on its corporate revolver.

The transaction is expected to close in the third quarter of 2019. It is seen to be modestly accretive to the buyer’s cash available for distribution (CAFD) in 2020 and over the next five years. TerraForm Power anticipates returns on equity on this investment within its targeted range of 9% to 11%.

Including this planned sale, AltaGas has announced or completed some CAD 1.3 billion (USD 992m/EUR 884m) of the targeted asset divestitures of between CAD 1.5 billion and CAD 2.0 billion for this year, it said.

(USD 1.0 = EUR 0.891)

(CAD 1.0 = USD 0.763/EUR 0.680)

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Ivan is the mergers and acquisitions expert in Renewables Now with a passion for big deals and ambitious capacity plans.

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