AEP will purchase all Sempra Renewables wind projects currently in development. Credit: Johanna Montoya on Unsplash.

US-based Sempra Energy has agreed to sell the remaining wind operating and development assets of its renewables subsidiary to American Electric Power (AEP) for $551m in cash, subject to closing adjustments and working capital.

The renewable assets being sold under the agreement include the Black Oak Getty Wind project in Minnesota and the Apple Blossom Wind project in Michigan.

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In addition, the transaction includes the sale of Sempra Renewables’ interests in other projects. These are Auwahi Wind in Hawaii, Flat Ridge 2 Wind in Kansas, Mehoopany Wind in Pennsylvania, Cedar Creek 2 Wind in Colorado, and Fowler Ridge 2 Wind in Indiana, which are jointly owned by BP Wind Energy.

Sempra Energy president and chief operating officer Joseph Householder said: “The agreement to sell our US wind assets along with the previously announced sales of our US solar and natural gas storage assets are expected to generate approximately $2.5bn in cash proceeds to support our growth plan as we strive to become North America’s premier energy infrastructure company.

“The timing of these asset sales is important as we look to redeploy new capital into important growth at our US utilities where we are improving the safety and reliability of electric and gas service.”

“The timing of these asset sales is important as we look to redeploy new capital into important growth at our US utilities.”

Under the agreement, AEP will also acquire all of the Sempra Renewables wind projects currently in development.

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The sale to AEP comprises nearly 724MW of capacity in Sempra Energy’s non-utility US renewables portfolio and is expected to complete in the second quarter of this year.

Sempra Energy is being served by Credit Suisse and JP Morgan as lead financial advisers in the transaction, while Latham & Watkins is acting as its legal adviser.

The sale is subject to customary closing conditions and consents, including the Federal Energy Regulatory Commission (FERC) and Hart-Scott-Rodino Antitrust Improvements Act approvals.

In December, Sempra Energy completed the sale of its operating solar assets and battery storage development projects, as well as its stake in a wind facility to Consolidated Edison for $1.54bn in an all-cash transaction.