American Electric Power (AEP) subsidiary AEP Clean Energy Resources has completed the purchase of Sempra Energy’s renewables business and its operating wind generation and battery assets.
The completion of the deal follows an agreement between both the parties in February this year. As part of the nearly $1.05bn deal, AEP has agreed to pay $551m in cash to Sempra.
The deal also includes $33m in working capital and assumption of $470m in existing project debt and tax equity obligations, subject to adjustments.
AEP chairman Nicholas Akins said: “The addition of these high-quality renewable assets and the experience of our new employees will support our long-term strategy to diversify our generation fleet.
“We’ve targeted a total of $2.2bn in capital investment in competitive, contracted renewables by 2023. The long-term contracts and attractive returns associated with these existing assets will be immediately accretive to earnings and solidify our projected 5% to 7% earnings growth rate.”
The assets purchased by AEP include all or part of seven wind farms and one battery installation located in seven US states such as Colorado, Indiana and Pennsylvania.
Five of the seven wind farms are jointly owned with BP Wind Energy, which intends to retain its stake in the projects.
These projects have long-term power purchase agreements (PPAs) in place with an average remaining life of 16 years. As part of the deal, 20 employees will join AEP Clean Energy Resources from Sempra Renewables.
AEP’s renewable generation portfolio has increased to 1,075MW with the purchase of Sempra’s assets.