The fundamental case for renewable energy investment remains exceptionally strong, as it’s being spurred by sustainable AI power demands. Brookfield’s differentiated business model, characterized by resilient cash flows, a strong balance sheet, and strategic positioning, allows the company to not only execute on current opportunities but also capitalize on emerging demand from AI and more.
Its diversified global portfolio spanning hydroelectric, wind, solar, and storage facilities across multiple continents provides geographic and technological diversification that mitigates regional market risks. With a robust development pipeline and disciplined capital allocation approach, the firm is well-positioned for growth over the long term.
BROOKFIELD RENEWABLE PARTNERS L.P. (Toronto symbol BEP.UN; www.bep.brookfield.com) owns 239 hydroelectric generating stations, 230 wind farms, 226 solar facilities, and 7,211 distributed generation and energy storage sites.
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In the quarter ended March 31, 2025, Brookfield’s revenue increased 5.9%, to $1.58 billion from $1.49 billion a year earlier (All amounts in U.S. dollars). The increase came from new plants plus acquisitions.
Cash flow rose 6.4%, to $315 million, or $0.48 a share, from $296 million, or $0.45.
Brookfield’s Major contract with Microsoft is a big plus
In May 2024, Brookfield signed an agreement with Microsoft Corp. to deliver more than 10.5 gigawatts of additional renewable energy capacity over a five-year period to power Microsoft’s AI cloud services business. Microsoft will sign firm contracts at prevailing power rates as the capacity is added. The capacity is part of Brookfield’s already announced expansion plans, but the deal gives it another high-credit-rated customer.
With the March 2025 payment, Brookfield raised your quarterly distribution by 5.1%. The new annual rate of $1.492 U.S. a unit yields a high 6.2%. The partnership aims to increase the annual payment by 5% to 9% each year.
Brookfield plans to invest between $8 billion and $9 billion over the next five year on new growth projects.
The partnership cuts the risk of these new projects with long-term power supply contracts. In fact, 90% of its cash flow comes from contracts with an average term of 14 years. As well, 70% of its revenues are indexed to inflation.
Brookfield’s cash flow will probably rise 10% in 2025 to $2.02 U.S. a unit, and the units trade at 12.5 times that estimate.
Recommendation in Canadian Wealth Advisor: Brookfield Renewable Partners L.P. is a buy.
