RWE Sells 51% Stake in 4 Texas Wind Farms to Algonquin Subsidiary for $600 Mn

RWE has signed an agreement with a subsidiary of Algonquin Power to sell a 51 percent stake in four of its onshore wind farms in Texas

Leading renewable energy company RWE has announced that it has signed an agreement with a subsidiary of Algonquin Power & Utilities Corp to sell a 51 percent stake in four of its onshore wind farms in Texas, accounting for a total pro-rata installed capacity of 439 megawatts (MW). The total consideration corresponds to an enterprise value of around USD 600 million (for the 51 percent stake), which translates to an implied enterprise value multiple of USD 1.4 million/MW. Two projects are in operation and two under construction. 

The disposal is part of RWE’s capital rotation program and the proceeds will be used to finance further growth in the renewable energy business.

The four onshore wind farms for which the parties agreed to enter a partnership are Stella, Cranell as well as East and West Raymond. With a total installed capacity of 861 MW, they are located in the coastal region of south Texas. Stella Wind Farm (201 MW) was commissioned in December 2018 and Cranell Wind Farm (220 MW) in September this year. Raymond East (200 MW) and West (240 MW) wind farms are currently under construction. They are expected to be commissioned by the end of this year and in the first quarter of 2021 respectively. Following the closing of the transaction, RWE will continue to operate all four wind farms.

The transaction is expected to close in the first quarter of 2021 and is subject to the commissioning of the projects under construction.

Algonquin is a diversified Canadian utility with assets across the US and Canada with a market capitalisation of approximately USD 10 billion. RWE constructs, owns and operates some of the highest performing wind, solar and energy storage projects in the US. RWE has significant experience in the U.S. with 25 onshore wind farms in operation. In addition, the company has now almost 1 GW of onshore wind farms under construction in the US and is building the Hickory Park solar project with co-located storage.

“The transaction with Algonquin demonstrates the attractiveness of RWE’s portfolio in North America. The US play a key role in RWE’s strategy to grow its renewables business and to become carbon neutral by 2040,” the firm issued in a statement.

By the end of 2022, RWE aims to expand its renewables portfolio to more than 13 GW capacity by investing EUR 5 billion net. Together with partners, the gross investment volume can amount to up to EUR 9 billion. To achieve its growth targets, RWE has an attractive project development pipeline of more than 22 GW, across all of the company’s strategic core regions.