American Electric Power is selling its 1,365 MW unregulated renewable energy portfolio to IRG Acquisition Holdings, a partnership owned by funds managed by Invenergy, CDPQ and Blackstone Infrastructure, with an enterprise value of $1.5 billion, including project debt.
The sales portfolio includes 14 projects representing 1,200 MW of wind power and 165 MW of solar power in 11 states. The renewable electricity from the projects has been acquired through long-term contracts with other institutions, companies and municipalities.
AEP plans to invest approximately $40 billion over the next five years in its regulated transmission and generation businesses, focusing on adding 17 GW of new generation resources and a more flexible, efficient transmission and distribution infrastructure to serve customers.
“We are committed to reducing corporate risk and prioritizing investments in our core regulated businesses,” says Julie Sloat, CEO of AEP. “Proceeds from the sale will be channeled into significant opportunities where we can improve customer service across our entire footprint and promote our transition to clean energy.”
The company announced its plan to sell the properties in February 2022 and launched a tender in August. JP Morgan is acting as lead financial advisor and Citigroup Global Markets is acting as financial advisor to AEP on this transaction. Hunton Andrews Kurth LLP is acting as legal advisor to AEP.
The deal is expected to close in the second quarter; AEP expects to receive about $1.2 billion in cash after taxes, transaction fees and other adjustments.