Renewable Energy M&A: Estimated at $1.1mn/MW: Explore the Key Drivers Behind BlackRock’s Texas Wind Deal

published on 14 June 2024

BlackRock has divested its 50% stake in the 211 MW Grandview wind farm in Texas to Overland Capital Partners, an investment fund owned by Japan-based ITOCHU Corporation.

⚡ Deal Details:

> Asset Maturity: 9.5 years

> Remaining Contracted Life: 10.5 years

> Route-to-market: Corporate and Utility PPAs for 90% of the capacity, remaining sold in the merchant market

Enerdatics Estimation: We estimate the enterprise value of the deal to be $120mn, at $1.1mn/MW.

🤝 Enerdatics has estimated the value of this transaction based on two analogous precedent deals for onshore wind portfolios in Texas:

* Clearway's $1mn/MW acquisition in Jun'22 aligns with our estimate

* Greencoat's $1.45mn/MW deal in Jan'21 reflects the premium paid for younger assets with monetizable tax credits

💡 Comparative Analysis:

– Location Advantage: Grandview sits within Texas’s competitive renewable energy zones (CREZs), which are demarcated prime areas for wind power due to abundant land and wind resources, boosting the project's value

– Tax Credit Impact: The project received tax equity investment in 2015, but those benefits have nearly expired, exerting downward pressure on the valuation

The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.

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