NextEra Energy Partners (NEP 3.21%) has agreed to acquire a portfolio of U.S. onshore wind assets from Brookfield Renewable (BEP 1.15%) (BEPC 1.40%) for $733 million. The transaction will enhance NextEra Energy's growth strategy while allowing Brookfield Renewable to recycle capital into higher-returning opportunities.
NextEra Energy Partners is acquiring three wind-powered generating facilities in California and one in New Hampshire with 391 megawatts of capacity. Brookfield secured long-term power purchase agreements with high-quality customers for nearly all the power these wind farms produce. Because of that, NextEra has high visibility into their future cash flows. That leads it to believe they'll contribute an average of $63 million to $70 million of adjusted EBITDA and cash available for distribution (CAFD) over the next five years.
The transaction accomplishes several goals for NextEra Energy Partners. It will enable the company to deliver adjusted EBITDA and CAFD toward the upper end of its guidance ranges in 2021. It will enhance its long-term strategy of growing its dividend at 12% to 15% annually through 2024. And it's another demonstration of its ability to secure third-party acquisitions so that it's not entirely reliant on its parent, the utility NextEra Energy (NEE 4.00%), to achieve its dividend growth strategy.
Meanwhile, the transaction will enhance Brookfield Renewable's balance sheet in the near term, giving it additional flexibility to make higher-returning investments when opportunities arise. It's the company's second wind-asset sale this month, as it continues to recycle capital out of wind and into solar energy, where it sees a brighter future. That strategy supports Brookfield's view that it can grow its cash flow at a more than 10% annual rate through 2025 while increasing its dividend by 5% to 9% per year.