Duke Energy closed Friday on the $1.25 billion sale of a minority stake in a total of 41 commercial wind, solar and battery-storage projects to a John Hanckock Infrastructure Fund.
The sale by Duke Energy Renewables involves a 49% share of 19 wind projects and of the battery project associated with its NoTrees wind farm in Texas. So it is a large minority share. It also involves stakes of 33% to 49% in 21 solar projects, including 10 in California.
The deal, first announced in April, includes some assumption of debt for the projects. Duke expects to clear about $415 million in cash from the sale.
Rob Caldwell, president of Duke Energy Renewables, notes that the commercial subsidiary of Duke Energy Corp. (NYSE: DUK) has announced 1,1000 megawatts worth of additional projects this year. All of them will be online in 2020. The agreement allows for John Hancock to buy into additional projects, but no such deal has been announced as yet.
"We’re excited to begin partnering with John Hancock to continue providing clean and affordable energy to our customers across the country,” Caldwell says in a prepared statement. "We see a bright future for renewables investment and this collaboration will help us deliver long-term value to customers and investors.”
Recep Kendircioglu, portfolio manager for the infrastructure company, calls the deal "a rare opportunity to acquire a diversified, large scale renewable energy portfolio alongside a high-quality partner and operator.” He says the companies "share a common view on the importance of renewable energy in the U.S." and that he looks forward to a successful partnership.
John Hancock Infrastructure Funds is a subsidiary of John Hancock Life Insurance Co. The deal is heavily weighted toward wind projects, which account for about 2,400 megawatts worth of power involved in the sale. Solar projects account for about 325 megawatts of power in the sale.
Morgan Stanley served as exclusive financial adviser in the deal, and Hunton Andrews Kurth LLP served as legal adviser to Duke Energy. John Hancock was advised by the law firms Mayer Brown LLP and Day Pitney LLP.