American Electric Power Company Inc (AEP) and PNM Resources announced on Tuesday that they have entered into an agreement to sell their respective 50% stakes in New Mexico Renewable Development LLC (NMRD), a joint venture holding solar assets with a total potential capacity of 625 megawatts (MW).
Exus North America Holdings LLC is set to acquire the full ownership of NMRD for approximately $230 million (EUR 209 million), subject to true-up adjustments at the closing of the deal. The transaction includes a portfolio of nine operating solar parks with a combined capacity of 185 MW and six projects under development, boasting an estimated total capacity of 440 MW. Regulatory clearance pending, the transaction is expected to be completed in February 2024.
With a share of the sale valued at $115 million, AEP anticipates receiving around $104 million in cash after tax, transaction fees, and customary adjustments. The move aligns with AEP's strategic focus on simplifying its business and concentrating on core regulated operations, reinforcing the company's commitment to creating a reliable and customer-centric energy system.
PNM Resources stated that its portion of the gross proceeds will be utilized to support regulated capital investments, contributing to the ongoing development and enhancement of its energy infrastructure.
The sale of their interests in NMRD marks a strategic step for both AEP and PNM Resources, supporting their respective business objectives and reinforcing their commitment to navigating the evolving energy landscape.