American Electric Power to Sell Renewable Portfolio to IRG for $1.5 Billion

The portfolio consists of 1.2 GW of wind and 165 MW of solar projects


American Electric Power (AEP) has agreed to sell 1,365 MW of its unregulated, contracted renewables portfolio to IRG Acquisition Holdings at an enterprise value of $1.5 billion, which includes the associated project debt.

IRG is a partnership owned by Invenergy, Caisse de dépôt et placement du Québec, and funds managed by Blackstone Infrastructure.

The portfolio being sold consists of 14 renewable energy projects spread across 11 states. Of the total capacity, 1.2 GW is from wind projects, while 165 MW is from solar projects. The electricity generated by these projects is contracted under long-term agreements with various utilities, corporations, and municipalities.

The transaction is expected to be finalized in the second quarter of 2023.

Upon closing, AEP would receive around $1.2 billion in cash, net of taxes, transaction fees, and other customary adjustments.

The sale will provide AEP with the necessary capital to support its investment plan of approximately $40 billion over the next five years in its regulated wires and generation business. This investment will allow the company to add 17,000 MW of new generation resources and develop its transmission and distribution infrastructure.

“We’re committed to de-risking the company and prioritizing investments in our core regulated businesses. The proceeds from the sale will be directed to the significant pipeline of opportunities we have to enhance service for customers across our footprint and advance our clean energy transition,” said Julie Sloat, President, and Chief Executive Officer of AEP.

AEP has engaged J.P. Morgan as the lead financial advisor, and Citigroup Global Markets as the transaction’s financial advisor. Hunton Andrews Kurth has been appointed as legal counsel to AEP.

AEP announced its plan to sell the assets in February 2022 and launched a competitive bidding process in August.

AEP produces approximately 31 GW of diverse generating capacity, including more than 6.9 GW of renewable energy. The company’s plans include growing its renewable generation portfolio to about 50% of total capacity by 2032.

The electric utility said it is on track to reach an 80% reduction in carbon dioxide emissions from 2005 levels by 2030 and has committed to achieving net zero by 2045.

Last March, AEP invited bids to procure power from 800 MW of wind and 500 MW of solar projects and additional capacity resources to meet the overall capacity need in Indiana, U.S.

In February, AEPSC issued an RfP to procure power from 150 MW solar projects with optional battery energy storage systems in West Virginia.