TransAlta Renewables has signed an agreement to acquire a 122 MW operational solar portfolio in North Carolina, United States.
The company will acquire the portfolio from a fund managed by Copenhagen Infrastructure Partners for $96.65 million and using existing liquidity. The acquisition is expected to be completed in the fourth quarter of 2021.
The portfolio includes 20 solar projects with capacities ranging between 3.2 MW and 6.7 MW. The facilities have long-term power purchase agreements (PPA) with two subsidiaries from Duke Energy which have an average remaining term of 12 years. Under the PPAs, Duke receives the renewable electricity, capacity, and environmental attributes from each facility. The portfolio is expected to generate 195 GW of green energy annually.
According to TransAlta, the portfolio is expected to generate average annual earnings before interest, taxes, depreciation, and amortization (EBIDTA) of $9 million and average annual cash available for distribution of $7 million.
Commenting on the acquisition, Todd Stack, president of TransAlta Renewables, said, “This purchase marks an important and significant expansion of our solar footprint in the United States and is a natural fit for TransAlta Renewables given our focus on diversified, highly-contracted cash flows from strong counterparties.”
“The acquisition further strengthens our expertise in solar energy and adds a new, high-quality consumer in a region where we see significant opportunities for solar growth. We are excited to continue our path of expanding our position as a market leader in clean, renewable electricity,” Stack added.
The transaction is structured so that at closing, TransAlta Renewables will acquire a 100% economic interest in North Carolina Solar from a wholly-owned subsidiary of TransAlta Corporation through a tracking share structure.
Last month, independent power producer Soltage and investment management firm Harrison Street announced an investment in a 20 MW portfolio of community solar assets and Public Utility Regulatory Policies Act solar projects located in North Carolina, South Carolina, and Maine.
According to Mercom’s 1H and Q2 2021 Solar Funding and M&A Report, project acquisition activity was at a record high in Q2 2021, with over 24 GW of solar projects acquired compared to 14.6 GW in Q1 2021. Project developers and independent power producers were the most active acquirers in Q2 2021, picking up 13.3 GW, followed by oil/gas majors acquiring 9 GW of solar projects.