Brookfield Renewable to buy $860m hydro portfolio from Talen

Brookfield Renewable Energy Partners has agreed to buy 292MW hydropower portfoliofrom Talen Energy for $860m.

The Bermuda-based electricity company will fund the acquisition with institutional partners and have a 40% economic interest in the portfolio.

The hydro portfolio is made up of two facilities in Pennsylvania the 252-MW Holtwood hydropower plant (HPP) on the Susquehanna River and the 40-MW Wallenpaupack facility on Lake Wallenpaupack in the Pocono Mountains generate 1.1 million MWh of average power annually.

Brookfield chief executive Sachin Shah said: “These high-quality assets provide a unique opportunity to leverage our operating platform and hydroelectric expertise in a market facing significant coal retirements and increasing reliance on renewables.”

All power output is currently sold into PJM, a regional transmission organization, and the portfolio benefits from varied revenue stream which includes energy, capacity, ancillary services and renewable energy credits.

The Holtwood hydropower plant and the Wallenpaupack facility hold long-term FERC operating licenses until 2030 and 2045, respectively.

Talen expects to use the proceeds from the deal to cut down its debt, which stands at $3.18bn.

The transaction is subject to regulatory approvals and is expected to close by first quarter of 2016.

The firm also plans to invest in India and is said to be evaluating a potential to make investments in companies such as Mytrah Energy Ltd and Leap Green Energy Pvt. Ltd.

Brookfield is interested in investing in India as the country made renewable energy its top agenda and is looking to offer clean power at less than Rs.4.50 per unit.

India requires $200bn to achieve its target of installing 100GW of solar power and 60,000MW of wind power by 2022.

Earlier, Brookfield entered into a tie-up with India-based NTPC Ltd, GE Energy Financial Services, Asian Development Bank and Kyushu Electric Power Co for establishing non-conventional power generation capacity of 500MW.