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Ontario Teachers’ Pension Plan (OTPP) Board will invest close to $805 million in a convertible equity portfolio financing with NextEra Energy Partners to help it acquire a nearly 2 GW renewable portfolio.
OTPP committed to the investment as part of the sale of renewable energy assets from NextEra Energy Resources, a subsidiary of NextEra Energy, to NextEra Energy Partners.
The portfolio comprises four newly constructed and nine operating wind, solar, and energy storage assets geographically spread across the U.S. power markets. The assets have long-term power purchase agreements with diversified, investment-grade counterparties.
The global investor expects to close the transaction later this year or by early 2023, subject to customary closing conditions and receipt of certain regulatory approvals.
The transaction marks Ontario Teachers’ second investment with NextEra Energy and NextEra Energy Partners and adds to its growing green asset portfolio.
“We are pleased to build on our partnership with NextEra Energy Resources and NextEra Energy Partners… and to make another significant investment in a portfolio of high-quality wind and solar energy assets,” said Chris Ireland, Senior Managing Director, Greenfield and Renewables at Ontario Teachers’.
He added that the assets portfolio across the United States strongly complements their existing holdings and gives them additional exposure to the market.
The investment is being made by the Greenfield and Renewables team, which is part of the infrastructure & natural resources department at the OTPP. The total pro-rata capacity of the Greenfield and Renewables portfolio equals approximately 5.6 GW.
The current investments include development-focused platforms such as Cubico sustainable investments, Anbaric development partners, Equis developments, and Corio generation, and a direct ownership stake in a portfolio of operating assets alongside NextEra Energy Resources.
OTPP’s financial advisor for the transaction was TD Securities, and Kirkland & Ellis LLP was the legal advisor.
NextEra Energy reported a third-quarter (Q3) net income of $1.68 billion, a year-over-year increase of 13.5 % compared to $1.48 billion in Q3 2021.
In September, Ontario Teachers’ acquired a 30% equity stake in Mahindra Susten, a cleantech arm of Mahindra Group, for an equity value of ₹23.71 billion (~$289.92 million).