Thursday, September 5, 2019

Brookfield Renewable Partners: Have Your Cake And Eat It Too

Brookfield Renewable Partners L.P. (BEP) is a globally diversified, multitechnology, owner and operator of renewable power assets. In my last article I wrote about ESG investing and whether Ecolab could be an addition to my portfolio. In this article I’ll take a dive into Brookfield Renewable Partners.

Business model
The business model of BEP is actually rather simple. They acquire and develop renewable power assets and businesses (mainly hydro, solar and wind), finance these assets with a mix of debt (investment grade basis) and equity and optimize cash flow and value utilizing their operating expertise. BEP locks in stable cash flows via long-term (usually 20-year), inflation-adjusted power purchase agreements (PPAs). These contracts are mostly entered into with utilities, distribution companies, and industrial users. Most of these counterparties have investment-grade credit ratings, and the weighted average remaining contract is for 16 years.

Read the rest of this article on Seeking Alpha!

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