Duke Energy enters into definitive agreement to sell minority interest in its commercial renewable energy portfolio to John Hancock

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  • Duke Energy to continue managing wind and solar assets and growing its commercial renewable energy portfolio 

  • John Hancock has an extensive track record as a long-term investor in infrastructure assets

CHARLOTTE, N.C. – Duke Energy (NYSE: DUK) today announced that it has entered into a definitive agreement to sell a minority interest in a portion of its commercial renewable energy portfolio owned and operated by its affiliate, Duke Energy Renewables, to the John Hancock Infrastructure Fund (“JHIF”) and John Hancock Life Insurance Company (U.S.A) (collectively, “John Hancock”), a division of Manulife Financial Corporation.

The total enterprise value of this portion of Duke Energy’s commercial renewable energy portfolio is approximately $1.25 billion (including proportional existing project-level debt). The sale will result in pre-tax proceeds to Duke Energy of $415 million. As majority owner, Duke Energy remains committed to growing its commercial renewable energy business. The transaction will help fund the company’s future growth capital plans with proceeds used to reduce future debt issuance needs. Duke Energy will retain the majority of the remaining tax benefits from the projects.

The portion of Duke Energy’s commercial renewables energy portfolio to be sold includes 49% of 37 operating wind, solar and battery storage assets and 33% of 11 operating solar assets across the U.S. Once the sale has closed, John Hancock’s interest will represent approximately 1.2 gigawatts of generating capacity.

John Hancock will also have the right to acquire a minority interest in certain additional wind and solar projects in the future, providing a potential source of future growth capital to Duke Energy.

“We look forward to working alongside John Hancock as we continue providing clean and affordable energy to our customers across the country,” said Rob Caldwell, president of Duke Energy Renewables. “We will continue to develop projects, grow our portfolio and maintain overall operational responsibilities for the projects just as we do today. John Hancock’s investment offers clear validation of the strength of our existing portfolio, and this partnership provides an opportunity for ongoing collaboration and investment as we deliver long-term value to our customers and investors.” 

The sale is subject to customary closing conditions, including approvals from the Federal Energy Regulatory Commission (FERC), the Public Utility Commission of Texas (PUCT) and the Committee on Foreign Investment in the United States (CFIUS).

The transaction is expected to close in the second half of 2019.

JHIF, an infrastructure-focused private equity fund with approximately $2 billion of committed capital, is managed by John Hancock’s Infrastructure team, and is part of Manulife Private Markets.

“We are excited to partner with a leading, strategic owner and operator such as Duke Energy in a high-quality renewable energy portfolio,” said Recep Kendircioglu, Portfolio Manager of JHIF and Head of John Hancock’s Infrastructure Investments. “This partnership exemplifies a key component of our investment strategy and represents an attractive opportunity to deploy capital in the renewable energy sector.”

Morgan Stanley served as exclusive financial advisor and Hunton Andrews Kurth LLP served as legal advisor to Duke Energy. John Hancock was advised by Mayer Brown LLP and Day Pitney LLP.
Duke Energy
Duke Energy (NYSE: DUK), a Fortune 125 company headquartered in Charlotte, N.C., is one of the largest energy holding companies in the U.S. It employs 30,000 people and has an electric generating capacity of 51,000 megawatts through its regulated utilities and 3,000 megawatts through its nonregulated Duke Energy Renewables unit.

Duke Energy is transforming its customers’ experience, modernizing the energy grid, generating cleaner energy and expanding natural gas infrastructure to create a smarter energy future for the people and communities it serves. The Electric Utilities and Infrastructure unit’s regulated utilities serve approximately 7.7 million retail electric customers in six states – North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky. The Gas Utilities and Infrastructure unit distributes natural gas to more than 1.6 million customers in five states – North Carolina, South Carolina, Tennessee, Ohio and Kentucky. The Duke Energy Renewables unit operates wind and solar generation facilities across the U.S., as well as energy storage and microgrid projects.
Duke Energy was named to Fortune’s 2019 “World’s Most Admired Companies” list and Forbes’ 2019 “America’s Best Employers” list. More information about the company is available at duke-energy.com. The Duke Energy News Center contains news releases, fact sheets, photos, videos and other materials. Duke Energy’s illumination features stories about people, innovations, community topics and environmental issues. Follow Duke Energy on Twitter, LinkedIn, Instagram and Facebook.
Duke Energy Renewables
Duke Energy Renewables, a nonregulated unit of Duke Energy, operates wind and solar generation facilities across the U.S., with a total electric capacity of 3,000 megawatts. The power is sold to electric utilities, electric cooperatives, municipalities, and commercial and industrial customers. The unit also operates energy storage and microgrid projects. Visit Duke Energy Renewables for more information.
John Hancock and Manulife
John Hancock is a division of Manulife Financial Corporation, a leading international financial services group that helps people make their decisions easier and lives better. We operate primarily as John Hancock in the United States, and Manulife elsewhere. We provide financial advice, insurance and wealth and asset management solutions for individuals, groups and institutions. Assets under management and administration by Manulife and its subsidiaries were more than CAD$1.1 trillion (US$794 billion) as of December 31, 2018. Manulife Financial Corporation trades as MFC on the TSX, NYSE, and PSE, and under 945 on the SEHK. Manulife can be found at manulife.com.

One of the largest life insurers in the United States, John Hancock supports approximately 10 million Americans with a broad range of financial products, including life insurance, annuities, investments, 401(k) plans, and college savings plans. Additional information about John Hancock may be found at johnhancock.com.

Manulife and John Hancock offer comprehensive wealth and asset management solutions for institutional and retail investors globally across a broad range of public and private asset classes, as well as asset allocation solutions. Manulife’s Private Markets platform offers long term solutions for its clients by leveraging our expertise across private equity and private credit, real estate equity and debt, infrastructure equity, timberland and farmland.
Cautionary Language Concerning Forward-Looking Statements
This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management’s beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as "anticipate," "believe," "intend," "estimate," "expect," "continue," "should," "could," "may," "plan," "project," "predict," "will," "potential," "forecast," "target," "outlook," "guidance," and similar expressions. Various factors may cause actual results to be materially different than the suggested outcomes within forward-looking statements; accordingly, there is no assurance that such results will be realized.  These risks and uncertainties are identified and discussed in Duke Energy’s Form 10-K for the year ended December 31, 2018, and subsequent quarterly reports filed with the Securities and Exchange Commission (“SEC”) and available at the SEC’s website at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than Duke Energy has described. Duke Energy expressly disclaims an obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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