Invenergy-Led Consortium Closes $1.5B Purchase

American Electric Power has closed the sale of its 1,365-megawatt (MW) unregulated, contracted renewables portfolio to IRG Acquisition Holdings (IRGAH), a partnership owned by Invenergy, CDPQ, and funds managed by Blackstone Infrastructure, at an enterprise value of $1.5 billion including project debt, according to separate news releases from AEP and Invenergy.

Upon closing of the transaction, AEP said it gained a net of approximately $1.2 billion in cash after taxes, transaction fees, and other customary adjustments.

The sale portfolio includes 14 projects, representing 1,200 MW of wind and 165 MW of solar in 11 states. The renewable power from the projects is contracted under long-term agreements with other utilities, corporations, and municipalities, AEP said.

AEP signed an agreement to sell the assets in February 2023 and obtained approval from the Federal Energy Regulatory Commission, clearance from the Committee on Foreign Investment in the United States, and approvals under applicable competition laws, according to the release.

“This sale is part of our strategy to streamline and de-risk the business and focus on our regulated operations”, AEP President and CEO Julie Sloat said. “Over the next five years, we plan to invest nearly $40 billion primarily in our regulated wires and generation businesses. The proceeds from this sale will be used to continue to modernize the energy grid, shift to a more balanced generation portfolio and enhance service for our customers while strengthening our balance sheet”.

“This transaction was the result of our innovative financing approach, the strength of our investor consortium, and our exceptional team who will integrate the projects into our portfolio in collaboration with our partners and service providers”, Invenergy Executive Vice President and CFO Meghan Schultz said. “Invenergy has industry-leading operations and asset management capabilities, and we look forward to applying our unmatched expertise to this portfolio of projects”.

IRGAH secured a $580 million commitment for a first-of-its-kind federal production tax credit transfer with Bank of America Securities, who served as its financial advisor, Invenergy said.

“We are excited to support this transaction with Invenergy and their partners in IRG Acquisition Holdings. This represents the first announced large-scale transferability transaction to close since the passing of the Inflation Reduction Act (IRA) in August 2022 and creates a financeable transferability product that will be used to scale the growth of renewable energy, energy transition, and its associated supply chain development,” Bank of America Global Head of Sustainable Finance Karen Fang said.

The transaction “represents one of the largest, fully-operational renewables portfolios to come to market in years”, global law firm Norton Rose Fulbright said in a separate news release. Norton Rose Fulbright advised IRGAH through the purchase and closing of the transaction.

Renewables Portfolio Milestone

In July, Invenergy subsidiary Invenergy Services announced that its portfolio has surpassed 20 gigawatts of clean energy generation projects under management in less than 20 years.

Invenergy Services said it has a portfolio of 158 projects composed of 109 wind projects totaling over 11,500 MW, 23 solar projects totaling over 2,300 MW, 12 thermal projects totaling over 5,700 MW, and 19 energy storage projects totaling over 460 MW.

“This milestone is a reflection of what can be achieved when you combine deep technical expertise, an owner’s mindset, strong partnerships, and a dedicated team with a clear vision to operate these plants like they’re our own”, Invenergy President and Corporate Business Leader Jim Murphy said. “We are incredibly proud of the sustained growth of Invenergy Services’ managed portfolio and look forward to expanding our services to optimize sustainable energy operations around the world”.

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