Invenergy-led power trio snaps up gigascale AEP US wind and solar in $1.5bn deal

Chicago-based developer in partnership with CDPQ and Blackstone takes over 14 projects spread across 11 states, boosting total renewables portfolio toward 4.5GW

Richard Kessler

A group led by US renewables major Invenergy has set the seal on a $1.5bn deal to buy a 1.35GW portfolio of unregulated, contracted wind and solar power projects spread across 11 states from American Electric Power (AEP).

Through the buy-up, IRG Acquisition Holdings – made up of Invenergy with a 20% stake, Canadian institutional investor CDPQ (Caisse de dépôt et placement du Québec) and funds managed by Blackstone, each with 40% shares – will add 14 renewables developments to its books.

“Invenergy is proud to bring our industry-leading development, financial, and operating expertise to this quality renewable operating portfolio,” said Jim Murphy, president of the privately held, Chicago-based company.

“Our longstanding record of working with AEP, familiarity with the portfolio projects, and the strength and cohesiveness of our investor consortium led to this significant agreement,” he added.

The AEP portfolio includes wind projects totalling some 1.2GW of nameplate, located in Colorado, Kansas, Indiana, Michigan, Minnesota, Pennsylvania, and Texas, while the solar plants, around 170MW of capacity, are in California, Nevada, and Utah.

With the asset sale, expected to close in the second quarter, AEP becomes the latest major US utility to exit competitive renewable energy markets to focus on lower-risk regulated investments that can produce higher and more predictable financial returns.

Electric power generated by the soon-to-be Invenergy-owned wind and solar facilities is contracted under long-term agreements to various corporations, municipalities, and utilities.

The deal expands Invenergy's stable of solar and wind plant by about one-third, from just over 3GW in 2022 toward close to 4.5GW, and is expected to enable it to better leverage economies of scale and compete in certain regional markets.

Invenergy, which has a US wind, solar, and battery storage focus alogn with renewables projects in Japan, Poland, and the UK, is majority owned by CDPQ, an investment fund based in Montreal. Last year, Blackstone invested $3bn to become Invenergy’s largest minority shareholder, although its exact stake was not disclosed.

AEP – among the largest US utility holding companies with power generation as well as operator of the nation’s largest transmission system in the Midwest, Texas and neighbouring states – said it expects to clear $1.2bn in cash proceeds after tax and transaction costs and will use the funds to support regulated businesses.

AEP’s regulated utilities expect to invest $9bn over the next five years to add solar and wind capacity which will help allow retirement of coal-fired plants.

Invenergy-led power trio snaps up gigascale AEP US wind and solar in $1.5bn deal

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