Brookfield Renewable sells onshore wind operations in UK and Ireland
Brookfield Renewable Power (NYSE: BEP)(NYSE: BEPC) has agreed to sell its onshore wind activities in the UK and Ireland to the Danish renewable energy Orsted developer. The deal, which values the company at $ 683.6 million, is part of Brookfield Renewable’s fixed asset recycling program of selling mature assets and redeploying the proceeds to higher yielding opportunities.
Brookfield initially bought its onshore wind operations in Ireland and the UK in 2014. At the time, Europe was going through a financial crisis, which allowed Brookfield to take advantage of the opportunity to buy a company from operation and development of high quality wind farms in the region. . It has developed this activity through development projects and acquisitions, largely financed by internal recycling of capital. The company currently has 389 megawatts (MW) of onshore wind farms in operation, 149 MW under construction and more than 1 gigawatt in its development pipeline.
While the Irish and UK onshore wind markets offer attractive returns, Brookfield sees better investment opportunities elsewhere. The company has built an important solar energy development pipeline and recently obtained the opportunity to invest in a large scale offshore wind farm platform in Europe. He’s incredibly excited about the return potential of solar power, which he believes could become his biggest source of power over the decade.
Recycling capital is a major aspect of Brookfield Renewable’s funding strategy. The company aims to invest $ 800 billion to $ 1 billion per year in development and acquisition projects, which it will finance in part through the sale of assets.
Despite the loss of income from asset sales, Brookfield estimates that it can increase its cash flow per share at an annual rate of more than 10% through 2025, which is expected to support annual growth of 5%. at 9% of its 4.5% dividend. This should give it the power to continue producing attractive total returns.
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