Shell Plc has entered into an agreement to divest a significant portion of its ownership stakes in two renewable power projects located in Texas and Ohio to infrastructure investment manager InfraRed Capital Partners. The transactions will be executed through Shell's subsidiaries, Shell Wind Energy Inc and Savion Energy LLC, according to a press release issued on Monday. The financial terms of the deal were not disclosed.
As part of the arrangement, Shell will sell 60% of its interest in Brazos Wind Holdings LLC, the owner of a 182-MW wind repowering project in Fluvanna, Texas, scheduled for completion early next year. Additionally, Shell will divest a 50% stake in Madison Fields Class B Member LLC, the owner of a 180-MW solar park project in Ohio's Madison County, anticipated to be operational by the end of 2023.
“This agreement follows our guidance at Shell's Capital Markets Day to pursue dilutions in ownership from power interests while maintaining access to renewable electrons via select offtake agreements,” stated Glenn Wright, Senior Vice President of Shell Energy Americas.
The transactions are set to be finalized by early 2024, with the effective date retroactively set to December 2023. Following the completion, Shell will retain the role of asset manager for both projects, which are eligible for Inflation Reduction Act (IRA) tax credits.
Post-closure, Shell Energy North America will continue as the sole off-taker for the Brazos wind farm's output, while Madison Fields will operate under its existing power purchase agreement (PPA) with a third party.
