Enbridge Inc. recently announced a deal whereby the Company will purchase an 80 percent interest in a portfolio of two wind farms in the U.S. from E.ON, one of the world’s largest investor-owned power and gas companies. The agreed enterprise value for the portfolio is approximately $650 million.
The 203 MW Magic Valley 1 wind farm located near Harligen, Texas and the 202 MW Wildcat 1 wind farm near Elwood, Indiana are operational and came into service in 2012. The two wind farms are located in areas with favourable wind regimes and combined, provide enough clean power for more than 120,000 households.
“This strategic investment provides a significant contribution to our growth targets in power generation,” said Vern Yu, Senior Vice-President of Corporate Development for Enbridge. “The transaction extends our renewable platform in the U.S., complementing our existing wind farm presence in Texas and establishing Enbridge in the Indiana renewable market. E.ON is a global leader in renewables and we welcome the partnership with a company that is a safe, reliable and proven asset operator.”
Enbridge has invested approximately $3 billion in renewable energy assets over the past five years. Upon closing, the acquisition of these two wind farms will bring Enbridge’s total net generating capacity of green power projects to more than 1,600 MW and helps position the Company to double existing capacity by 2018. The projects also further help Enbridge meet its Neutral Footprint commitment to generating a kilowatt hour of renewable energy for every additional kilowatt of energy consumed by its Liquids Pipelines business, a goal the Company is on track to meet by 2015.
Commenting on the deal, Eckhard Rummler, CEO of E.ON Climate & Renewables, said: “Thanks to our excellent project portfolio and our capabilities there is a vital demand in the market for assets built and operated by E.ON. We are happy to have found a reliable partner in Enbridge, who shares our approach of combining high class assets and safe operations.”
Under the terms of the agreement, E.ON will retain a 20 percent interest and remain the operator of the wind farms, demonstrating its ongoing commitment to the projects and the North American market. E.ON currently operates more than 2,700 MW of renewable capacity in the U.S. and is a leader in the American wind industry.
Completion of the transaction is subject to regulatory approvals.