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GIP to acquire NRG Energy’s US renewable energy business for $1.37bn

CTBR Staff Writer Published 08 February 2018

Infrastructure investor Global Infrastructure Partners’ (GIP) equity fund, Global Infrastructure Partners III has agreed to acquire the US renewable energy business of NRG Energy for $1.375bn in cash.

The deal also includes purchase of NRG Energy’s 46% economic interest in NRG Yield, which has an operational capacity of 5.1GW covering wind, solar and natural gas technologies. The deal is expected to close in the second half of this year, subject to customary closing conditions.

Besides, GIP has agreed to offer $400m backstop support for NYLD’s agreed purchase of the 527MW Carlsbad Energy Center project.

As per the agreement, GIP will also acquire NRG’s renewable operations and maintenance (O&M) and development business.

NRG’s O&M business operates 2.4GW of renewable power generation across 17 states. Its renewable development platform includes 630MW of identified “dropdown” assets, which are subject to a right of first offer from NYLD.  

GIP chairman and managing partner Adebayo Ogunlesi said: “We are excited to announce the acquisition of NRG’s world-class renewables business. We view each of the three acquired businesses – the NYLD stake, the O&M business, and the development business – as highly complementary and well positioned to capitalize on the increasing market demand for low cost, clean energy."

GIP has also made several major commitments to facilitate the transaction, including arranging a $1.5bn backstop credit facility to mitigate any change-of-control risk with NYLD’s existing corporate debt. 

NYLD president and CEO Christopher Sotos said: “With today’s announcement, NYLD can look forward to its next phase of growth, including solidifying near-term objectives through the most recent drop down transactions and, most importantly, aligning with GIP, whose strategy and breadth of global investment capabilities are well suited to our business model and long-term objectives.”

NYLD also owns thermal infrastructure assets with an aggregate steam and chilled water capacity of 1,319 net MWt and electric generation capacity of 123 net MW.  

Image: Until now, GIP has invested $9bn in renewable assets. Photo: Courtesy of Carlos Koblischek/FreeImages.com.