Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP) owns a portfolio of renewable power-generating facilities primarily in North America, Colombia, Brazil, Europe, India, and China. The company generates electricity through hydro, wind, solar, cogeneration, and biomass sources and owns a portfolio consisting of 17,500 megawatts of installed capacity. Brookfield Renewable Partners (BEP) was incorporated in 1999 and is headquartered in Toronto, Canada.
The company invests in renewable assets directly as well as with institutional partners and joint venture partners. BEP’s portfolio of assets has 19,000 megawatts of capacity and a development pipeline of approximately 13,500 megawatts, making the company one of the largest pure-play public renewable companies in the world.
The stock is very attractive, since BEP leverages the company’s extensive operating experience to maintain and enhance the value of assets, grow cash flows on an annual basis, and cultivate positive relations with local stakeholders. In 2020, BEP increased funds from operations (FFO) per unit by 13% driven by accretive growth and strong operational performance.
The company has a track record of a 10% FFO annual growth rate over the long term. In 2020, BEP advanced key commercial priorities and delivered on annual cost-saving initiatives totaling $40 million globally. The company invested $2 billion of equity in nine transactions, including doubling the size of BEP’s Asian and distributed generation businesses, adding a leading global solar developer, and investing in a hydro portfolio in Canada.
Recently, BEP commissioned 50 megawatts of new capacity, progressed approximately 2,100 megawatts through advanced-stage permitting, and increased the size of the company’s development pipeline to approximately 13,000 megawatts. BEP has always maintained a robust investment grade balance sheet and has $2.9 billion of available liquidity.
BEP’s business has benefitted from recent acquisitions, strong operational performance, and execution on margin enhancement initiatives. The company’s hydroelectric segment and storage segment has performed well, as BEP’s portfolio provides critical grid-stabilizing ancillary services and backup capacity to increasingly intermittent grids.
The company’s priority over the past decade has been to diversify the business and exposure to resource volatility, regional or market disruptions, and potential credit events. BEP has executed key contracting initiatives and owns a large distributed generation portfolio in the United States. The company’s focus in Latin America has extended the average duration of the portfolio’s power-purchase agreements.
Reinvestment is an important part of the investment thesis, as BEP has significant opportunity to deploy capital in global hydroelectric assets. The company’s wind and solar segments are growing fast as the portfolio benefits from recent growth initiatives including the acquisition of two wind portfolios in Asia.
The company has advanced global greenfield development activities and executed opportunistic outsourcing agreements to realize cost savings. In 2020, BEP signed power-purchase agreements for three wind repowering projects in New York and California totaling 220 megawatts.
Exciting growth initiatives at Brookfield Renewable Partners is expected to serve shareholders well over the long term. The company has created a Canadian corporation that will provide investors the optionality to invest in BEP through either the current partnership or through a corporation, which is expected to support the expansion of BEP’s investor base.
