NRG Energy has reached agreement with Global Infrastructure Partners (GIP) to sell its renewables platform and 46% ownership in publicly-traded yieldco NRG Yield for $1.375bn in cash.

NRG Energy expects the transaction, among the largest involving wind and solar assets, to close in the second half of this year.

If approved by federal and state regulators, the company tells Recharge that GIP would obtain its 500MW share of NRG Renewables' operating portfolio and 5.08GW of wind, solar and natural gas assets in NRG Yield. NRG Renewables has a 6.4GW project pipeline.

The deal does not include the 154MW Buckthorn PV project in Texas and 527MW gas-fired power plant in California that are under development, which the yieldco will purchase from NRG Energy for $407m.

Those drop downs are expected to close before year-end and are subject to both projects achieving commercial operations status as well as various customary closing conditions and approvals.

As part of the sale of NRG Energy’s interest in the yieldco, the two sides agreed to maintain a right-of-first-offer (ROFO) agreement for its remaining 102MW stake in the Agua Caliente PV facility in Arizona.

They also amended their ROFO agreement to remove the 392MW Ivanpah solar thermal plant in California as a ROFO asset.

Separately, NRG Energy agreed to sell its South-Central business unit that owns and operates a 3.555GW portfolio of fossil-fuel generation assets to Cleco Corporate Holdings for $1bn, subject to certain adjustments.

“Today’s announcement represents a significant milestone in simplifying our value proposition, optimizing our portfolio, and strengthening our balance sheet to create significant shareholder value,” says NRG Energy chief executive Mauricio Gutierrez.

The company has now announced agreements to sell $2.9bn in assets and expects to announce deals worth an additional $300m later this year, while reducing $7bn in consolidated debt.

Last July, NRG, which has financially underperformed for years, announced it had little appetite for renewables going forward as it sought to refocus on electricity markets and traditional forms of generation.

Gutierrez earlier stated that he believes the independent power producer model is “obsolete and unable to create value over the long term” given the major changes affecting the electric power sector in the US. NRG Energy is among the largest IPPs and operates a diverse fleet of renewable energy assets.

(Updates NRG Energy and NRG Yield asset figures involved in sale to GIP)

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NRG Energy to sell renewables assets and 46% stake in yieldco