Duke Energy Corp (NYSE:DUK) announced that it is selling its commercial distributed generation business to an affiliate of middle-market infrastructure investor ArcLight for an enterprise value of $364 million.
The energy holding company said it will net about $259 million in proceeds from the transaction which will be used to strengthen its balance sheet and avoid having to issue additional debt securities or bonds associated with these assets.
It added that the sale supports its focus on the growth of its regulated businesses, including investment to enhance grid reliability and incorporate more than 30,000 megawatts of regulated renewable energy into its system by 2035.
"The sale of our commercial renewables businesses streamlines our portfolio and provides the resources to support the long-term needs of our customers in our growing regulated territories," Duke CEO Lynn Good said in a statement.
The business being sold includes REC solar operating assets, development pipeline and operation and maintenance (O&M) portfolio, and distribution fuel cell projects managed by Bloom Energy. Employees of the distributed generation business will move to ArcLight to ensure business continuity is maintained, Duke noted.
The sale is expected to be finalized by the end of 2023.
Duke shares were trading up 0.3% at US$90.83 following the announcement.
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