NRG Energy has completed the divestment of its subsidiary NRG South Central Generating to US-based electric power company Cleco Corporate for $1bn.
The deal was first announced in February last year, when both companies entered into a purchase and sale agreement.
Under the deal, Cleco’s subsidiary Cleco Cajun bought eight generating assets totaling 3,555MW, transmission operations and contracts.
This deal will enable it to supply power to nine cooperatives in Louisiana, five municipalities across Louisiana, Texas and Arkansas, and one investor-owned utility.
Seven out of the eight assets will be managed by Cleco, while Cottonwood plant in Texas is being leased back to NRG, which will operate it on a temporary basis.
Cleco Cajun and Cleco Power will continue to operate as separate firms that are independently managed by Louisiana-based management.
Additionally, the deal is expected to significantly increase Cleco’s operations in Louisiana. It enables Cleco to increase its generating capacity by more than double, whilst also boosting the number of end-user customers by around 77%.
Cleco president and CEO Bill Fontenot said: “This is the largest acquisition in Cleco’s 85-year history. This significant investment highlights the commitment of Cleco and its owners to our customers, communities, employees and the state of Louisiana.”
NRG president and CEO Mauricio Gutierrez said: “The closing of the South Central transaction marks the achievement of yet another fundamental milestone in our transformation.
“With the majority of our asset sales program complete, we continue to focus on capital allocation, cost excellence and margin enhancement across our businesses.”
In August 2018, NRG Energy completed the divestment of its interest in NRG Yield and its Renewables platform to Global Infrastructure Partners. Through this deal, NRG Energy secured cash proceeds of $1.348bn, which was expected to help reduce its $6.7bn of debt from its balance sheet.