NRG Yield adds solar assets

NRG Yield has completed a previously announced acquisition of two 20MW solar PV facilities and a natural gas plant in California for $349m in cash, plus $657m in assumed project debt (as of 31 March).

The assets include the RE Kansas South and TA High Desert solar PV plants in Kings County and LA County, respectively, and the El Segundo Energy Center, a 550MW fast-start, gas-fired facility, also in LA County.

The plants were right of first offer (ROFO) assets from NRG Energy.   

 “The completion of the first-ever drop-down from NRG Energy demonstrates NRG Yield’s ability to successfully transact with its strategic sponsor and lays the foundation for robust long-term growth,” says NRG Yield chief executive David Crane.

He adds that when coupled with both the pipeline of NRG Yield-eligible projects owned by  NRG Energy, and the recently announced 947MW Alta Wind acquisition, the transaction “gives us the confidence to raise our long-term dividend growth target for NRG Yield.”

NRG Yield is now targeting an annualized dividend of $1.50 per share by the fourth quarter, which represents a 25% increase to its initial dividend.

The company is raising its 5-year target dividend per share compound annual growth rate to 15-18% from 10-15%.

As a result of this acquisition, NRG Yield also raised its full-year 2014 adjusted EBITDA guidance to $410m, from $292m.