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    RNW   CA8934631091

TRANSALTA RENEWABLES INC.

(RNW)
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TransAlta Renewables : Announces the Acquisition of a Fully Contracted 122 MW Solar Portfolio in North Carolina

09/02/2021 | 07:01am EST

CALGARY, AB, Sept. 2, 2021 /CNW/ - TransAlta Renewables Inc. ("TransAlta Renewables" or the "Company") (TSX: RNW) announced today that it has entered into definitive agreements for the acquisition of a 122 MW portfolio of operating solar facilities located in North Carolina (collectively, "North Carolina Solar").

The assets will be acquired from a fund managed by Copenhagen Infrastructure Partners for US$96.65 million, subject to working capital adjustments and the assumption of existing tax equity obligations. The acquisition will be funded using existing liquidity. Income distributions to the Company will be net of cash and tax attributes provided to the tax equity investor. The acquisition is subject to customary regulatory approvals and is expected to close in the fourth quarter of 2021. The transaction is structured so that at closing, TransAlta Renewables will acquire a 100% economic interest in North Carolina Solar from a wholly-owned subsidiary of TransAlta Corporation through a tracking share structure.

"This purchase marks an important and significant expansion of our solar footprint in the United States and is a natural fit for TransAlta Renewables given our focus on diversified, highly-contracted cash flows from strong counterparties," said Todd Stack, President of TransAlta Renewables. "The acquisition further strengthens our expertise in solar energy and adds a new, high-quality customer in a region where we see significant opportunities for solar growth. We are excited to continue along our path of expanding our position as a market leader in clean renewable electricity."

The North Carolina Solar portfolio consists of 20 solar photovoltaic facilities across North Carolina, with an aggregate capacity of 122 MW. The facilities are all operational and were commissioned between November 2019 and May 2021. The facilities are secured by long-term power purchase agreements ("PPAs") with two subsidiaries of Duke Energy ("Duke"), which have an average remaining term of 12 years. Under the PPAs, Duke receives the renewable electricity, capacity, and environmental attributes from each facility. North Carolina Solar is expected to generate an average annual EBITDA of approximately US$9 million and average annual cash available for distribution ("CAFD") of approximately US$7 million.

Investment Highlights

  • Expected production of approximately 195,000 MWh per year
  • Acquisition cost of US$96.65 million
  • Average annual EBITDA and CAFD of approximately US$9 million, and US$7 million, respectively
  • Investment Tax Credit ("ITC") Partnership flip-based tax equity structures with target flip dates in 2026 – 2028, with assumed tax equity obligations of US$28 million at close, reducing to US$11 million by end of 2021 upon monetization of the ITC
  • Long term contracted cashflows with investment grade counterparties, and
  • Provides further geographic, technology and counterparty diversification with potential synergies for future growth

Portfolio Overview

  • 20 operating facilities across North Carolina ranging in size from 3.2 MW to 6.7 MW
  • Commercial operational dates ranging from November 2019 to May 2021, and
  • Average remaining PPA term of 12 years with Duke

About TransAlta Renewables Inc.

TransAlta Renewables is among the largest of any publicly traded renewable independent power producers ("IPP") in Canada. Our asset platform and economic interests are diversified in terms of geography, generation and counterparties and consist of interests in 24 wind facilities, 13 hydroelectric facilities, eight natural gas generation facilities, one solar facility, one natural gas pipeline, and one battery storage project, representing an ownership interest of 2,633 megawatts of owned generating capacity, located in the provinces of British Columbia, Alberta, Ontario, Québec, New Brunswick, the States of Pennsylvania, New Hampshire, Wyoming, Massachusetts, Michigan, Minnesota, Washington and the State of Western Australia. Our objectives are to (i) provide stable, consistent returns for investors through the ownership of, and investment in, highly contracted renewable and natural gas power generation and other infrastructure assets that provide stable cash flow primarily through long-term contracts with strong counterparties; (ii) pursue and capitalize on strategic growth opportunities in the renewable and natural gas power generation and other infrastructure sectors; (iii) maintain diversity in terms of geography, generation and counterparties; and (iv) pay out 80 to 85 per cent of cash available for distribution to the shareholders of the Company on an annual basis.

Cautionary Statement Regarding Forward-looking Information
This news release contains forward looking statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "may", "will", "plans", and similar expressions are intended to identify forward looking information or statements. More particularly, and without limitation, this news release contains forward looking statements and information relating to: completion of the acquisition of a 122 MW portfolio of operating solar facilities and the associated benefits therefrom; expectations and plans for future growth; a forecast of the expected average annual EBITDA and CAFD; a forecast of the anticipated tax equity obligations and the expected annual production of the solar facilities. These forward-looking statements are based on a number of assumptions considered by the Company to be reasonable as of the date of this news release, including, but not limited to, the following: unanticipated impacts relating to novel coronavirus; no significant changes to applicable laws and regulations, including any tax and regulatory changes; no material adverse impacts to the investment and credit markets; and assumptions regarding the Company's current strategy and priorities. The forward-looking statements are also subject to a number of significant risks and uncertainties that could cause actual plans, performance, results or outcomes to differ materially from current expectation. Factors that may adversely impact what is expressed or implied by the forward-looking statements contained in this news release include risks relating to: regulatory approvals being satisfied or met, changes in the regulatory framework or market in which the North Carolina Solar facilities operate, the effects of weather and other climate-related risks, economic and competitive conditions, changes in the law or political developments; and other risk factors contained in the Company's Annual Information Form and Management's Discussion and Analysis for the year ended Dec. 31, 2020, which are available on SEDAR at www.sedar.com. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect the Company's expectations only as of the date of this news release. The purpose of the financial outlooks contained herein are to give the reader information about management's current expectations and plans and readers are cautioned that such information may not be appropriate for other purposes. The Company disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

SOURCE TransAlta Renewables Inc.

© Canada Newswire, source Canada Newswire English

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Financials
Sales 2021 463 M 362 M 362 M
Net income 2021 166 M 130 M 130 M
Net Debt 2021 1 029 M 806 M 806 M
P/E ratio 2021 30,7x
Yield 2021 5,08%
Capitalization 4 934 M 3 854 M 3 862 M
EV / Sales 2021 12,9x
EV / Sales 2022 12,0x
Nbr of Employees -
Free-Float 39,9%
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Mean consensus HOLD
Number of Analysts 13
Last Close Price 18,49 CAD
Average target price 19,81 CAD
Spread / Average Target 7,13%
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Managers and Directors
Todd J. Stack President
Brent Ward Chief Financial Officer
Allen R. Hagerman Chairman
David William Drinkwater Independent Director
Kathryn B. McQuade Independent Director
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