Brookfield Renewable (BEP)

The Contracted Yieldco Benchmark

Brookfield Renewable is the filed exception on contract disclosure: it files a proportionate long-term average (LTA) generation split. Operating capacity was 47,203 MW at 31 December 2025 (8,496 MW hydro, 16,753 MW wind, 13,993 MW solar, 5,817 MW distributed and storage). On 2025 proportionate LTA GWh, 18,736 GWh was contracted against 2,371 GWh uncontracted on 21,107 GWh total (~89% / ~11%); management also describes the fleet as ~90% contracted with ~70% of revenues inflation-indexed. The CAFD (cash available for distribution) bridge is the teaching line: Normalised FFO $1,484M minus sustaining capex $98M minus wind/solar amortisation $122M equals $1,264M at 90% payout on $2,698M proportionate Adjusted EBITDA. Combined economic equity was roughly $25–26 billion in June 2026, counting BEP partnership units plus BEPC exchangeable shares; NYSE BEP float alone understates it.

Business Overview

BEP is a Bermuda limited partnership yieldco for Brookfield's hydro, wind, solar, and storage platform. Proportionate reporting matches how analysts bridge EBITDA to CAFD at the partnership level. The development pipeline exceeds 200 GW globally with ~84 GW advanced-stage (land, permit, or grid secured); that MW sits off the operating balance sheet until dropped in.

Proportionate net debt was $15,624 million at 31 December 2025. Net debt divided by proportionate Adjusted EBITDA is ~5.8× (derived). That sits in the house 5–7× normal band for leveraged contracted assets, above Vistra's 2.6× forward quote and below AES's ~9.5× stretched merchant-developer mix.

How the Economics Work

The yieldco CAFD guide uses Brookfield's bridge as the worked example: Normalised FFO minus sustaining capex minus amortisation equals CAFD. Payout at 90% sits inside the house 80–95% sustainable screen when the sponsor funds growth capex at the holdco (the parent company that sits above the operating assets), outside CAFD.

Contract profile drives the multiple premium the contracted premium guide teaches. Brookfield files no EBITDA split between contracted and merchant, so ~89% contracted LTA GWh serves as the proxy; the ~90% contracted commentary agrees. That contracted share is well above merchant-majority peers such as Vistra and NRG, neither of which files a comparable consolidated split.

The PPA vs merchant guide treats BEP's filed LTA split as the disclosure hierarchy exception. Most independent power producers lack that line. Brookfield has it, which is why it anchors the contracted side of the comp set.

Valuation Framework

An EV/EBITDA read on Brookfield has to stay proportionate on both lines: combined market cap across both listed vehicles plus proportionate net debt of $15.6B, over $2,698M proportionate Adjusted EBITDA. With ~89% of generation contracted, most of the EBITDA in that ratio is contracted cash flow. CAFD yield on combined equity is the income lens; CAFD divided by partnership units alone misstates economic exposure if BEPC shares are excluded.

Pipeline optionality (>200 GW total, ~84 GW advanced) is valued off sponsor development, separate from BEP balance sheet MW. The house $1.0–1.5M/MW mark for contracted US wind/solar is a teaching default until transaction comps replace it.

Key Risks

Merchant 11% of LTA GWh. Uncontracted volume moves with hub prices in hydro, wind, and solar markets globally.

Leverage at ~5.8×. Normal for contracted yieldcos in the 5–7× band, but leaves less headroom than VST/NRG if EBITDA slips or refinancing widens.

Unit structure. Combined cap includes BEPC; screening BEP units alone understates economic equity and overstates leverage per dollar of CAFD.

EBITDA split not filed. Use the generation proxy (~89% / ~11%) or the ~90% contracted commentary. Any EBITDA-contracted percentage would be invented.

What the Screening Shows

Against the Renewables and IPPs Sector Primer thresholds:

• Capacity: 47.2 GW operating (proportionate). Hydro/wind/solar mix; global footprint.
• Contract profile: ~89% / ~11% on 2025 proportionate LTA GWh (filed). ~90% contracted fleet (commentary).
• CAFD: $1,264M; 90% payout. Inside 80–95% sustainable band.
• Leverage: ~5.8× net debt ÷ prop. Adj. EBITDA (derived). Normal contracted band.
• Pipeline: >200 GW total; ~84 GW advanced (sponsor/group; only part sits on BEP's balance sheet).

NRG and Vistra file no comparable contracted share because their books run merchant-heavy; the CAFD arithmetic is the same. Where an independent power producer files no LTA split, screen revenue mix and contract life instead.