American Electric Power is selling its 1,365 MW unregulated, contracted renewable energy portfolio to IRG Acquisition Holdings, a partnership owned by Invenergy, CDPQ and funds managed by Blackstone Infrastructure, at an enterprise value of $1.5 billion including project debt.
The sale portfolio includes 14 projects, representing 1,200 MW of wind and 165 MW of solar in 11 states. The renewable power from the projects is contracted under long-term agreements with other utilities, corporations and municipalities.
AEP plans to invest approximately $40 billion over the next five years in its regulated wires and generation business with a focus on adding 17 GW of new generation resources and more resilient, efficient transmission and distribution infrastructure to serve customers.
“We’re committed to de-risking the company and prioritizing investments in our core regulated businesses,” says Julie Sloat, AEP’s president and CEO. “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.”
The company announced its plan to sell the assets in February 2022 and launched a competitive bidding process in August. J.P. Morgan is serving as lead financial advisor, and Citigroup Global Markets is serving as financial advisor to AEP for this transaction. Hunton Andrews Kurth LLP is serving as legal counsel to AEP.
The sale is expected to close in the second quarter; AEP expects to net approximately $1.2 billion in cash after taxes, transaction fees and other adjustments.