American Electric Power (AEP) and PNM Resources (PNM) have agreed to sell their renewables joint venture (JV), New Mexico Renewable Development (NMRD), to Exus North America in a $230m deal.

This transaction will see AEP and PNM divesting their 50% stakes in NMRD, which includes 15 solar projects with a combined capacity of 625MW.

The NMRD portfolio is split between nine operational projects totalling 185MW as well as six under-development projects with an expected capacity of 440MW.

AEP initiated NMRD’s sale process in June this year, with KeyBanc Capital Markets and Foley & Lardner offering financial and legal advice, respectively, for the transaction.

This divestment now awaits regulatory approvals, with completion due in February next year.

The share of AEP and PNM in the gross proceeds is $115m each.

AEP looks to secure nearly $104m in “cash after tax, transaction fees and other customary adjustments” and does not expect a material impact on its financial performance following the deal.

PNM will utilise its share of the proceeds to facilitate regulated capital investments.

AEP chair, president and CEO Julie Sloat said: “This sale is another step forward on our path to simplify our business and focus on investing in our core regulated operations, and we continue to execute on our strategy to de-risk the company.

“Earlier this year, we completed the $1.5bn sale of other parts of our contracted renewables business. The proceeds from these sales are strengthening our balance sheet and supporting our continued efforts to create an energy system that benefits customers by providing safe, reliable and affordable electricity.”

In August this year, AEP sold its 1.3GW unregulated renewables portfolio to IRG Acquisition Holdings (IRGAH), a partnership between Invenergy, CDPQ and funds managed by Blackstone Infrastructure Partners.

The portfolio, sold for $1.5bn, has 14 projects including 1.2GW of wind and 165MW of solar.