Brookfield Renewable Energy Partners and its institutional partners have entered into an agreement with Alcoa Power Generating to acquire four of its hydroelectric generating stations for $600m.
The four individual generating stations Santeetlah, Cheoah, Calderwood and Chilhowee, together known as the Tapoco portfolio, are located on the Little Tennessee and Cheoah Rivers in eastern Tennessee and western North Carolina.
Brookfield Renewable will own a 25% interest in the hydroelectric generating stations while an institutional fund managed by Brookfield Asset Management will finance the remaining equity interest.
Brookfield Renewable president and CEO, Richard Legault, said the Tapoco facilities are proven generation assets, attractively situated in its core markets.
"The southern United States has favourable supply-demand dynamics with one of the highest areas of load growth in the US, and over the long-term should benefit from planned coal retirements and scarcity value by delivering clean, sustainable, and on-peak renewable power," said Legault.
The hydro plants are currently undergoing an extensive asset modernisation programme which will increase its installed capacity to 378MW and average annual generation to approximately 1.4m MW/h.
All output from the Tapoco portfolio is contracted to Tennessee Valley Authority till June 2014.
The transaction will be funded with non-recourse debt financing and drawings on Brookfield Renewable's credit facility, and issubject to regulatory approvals is expected to close before the end of 2012.
