US-based power generation company American Electric Power (AEP) has agreed to sell its 1.365GW portfolio of renewable assets to IRG Acquisition Holdings.

The unregulated, contracted portfolio has an enterprise value of $1.5bn, which includes project debt.

It includes 14 projects representing 1.2GW of wind capacity and 165MW of solar capacity across 11 US states.

The clean energy generated by the portfolio is sold to utilities, corporations and municipalities under long-term agreements.

IRG Acquisition Holdings is a partnership of Invenergy, CDPQ and funds managed by Blackstone Infrastructure.

AEP president and CEO Julie Sloat said: “We’re committed to de-risking the company and prioritising investments in our core regulated businesses.

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“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 deal is expected to close in the second quarter of this year.

Once it has closed, AEP expects to receive around $1.2bn in cash after taxes, transaction fees and other customary adjustments.

Over the next five years, AEP plans to invest nearly $40bn in its regulated wires and generation business.

The company also intends to add 1.7GW worth of new generation resources, as well as transmission and distribution infrastructure.

It announced plans to sell its assets in February last year and launched a competitive bidding process for them in August.

Based in Columbus, Ohio, AEP operates and maintains the US’ largest electricity transmission system, providing power to 5.6 million regulated customers in 11 states.

The company has around 31GW of diversified generating capacity, including more than 6.9GW of renewable energy.

It aims to increase its renewable generation portfolio to around 50% of its total capacity by 2032, as well as reach net-zero emissions by 2045.