Innergex Renewable Energy inks funding deal for hydroelectric projects

Innergex Renewable Energy Inc (TSX: INE) has raised $491.6 million in construction and term project financing for the Boulder Creek and Upper Lillooet River run-of-river hydroelectric projects located in British Columbia. The loan providers included The Manufacturers Life Insurance Co, the Caisse de dépôt et placement du Québec and The Canada Life Assurance Co. The projects are being developed by Creek Power Inc, a joint venture between Innergex and Ledcor Power Group Ltd. Based in Longueuil, Québec, Innergex is a renewable power producer. It has been backed in recent years by the Caisse de dépôt’s private equity group.

PRESS RELEASE

Innergex announces the closing of the financing for the Boulder Creek and Upper Lillooet River projects

$491.6M non-recourse construction and term project debt

Three tranches with varying terms to maturity and principal payments

Fixed interest rate of 4.22% and 4.46%

LONGUEUIL, QC, March 17, 2015 /CNW Telbec/ – Innergex Renewable Energy Inc. (TSX: INE) (“Innergex” or the “Corporation”) announces that Boulder Creek Power Limited Partnership and Upper Lillooet River Power Limited Partnership have jointly closed a $491.6 million non-recourse construction and term project financing for the Boulder Creek and Upper Lillooet River run-of-river hydroelectric projects located in British Columbia, Canada. The developer of these projects is Creek Power Inc., a joint venture between Innergex (which owns 66.67%) and Ledcor Power Group Ltd. (which owns 33.33%).

“This is the largest project-level financing Innergex has ever secured. We are very satisfied with terms that provide for fixed-rate debt at an attractive rate over the life of the power purchase agreements for these projects. In addition, we were able to work with our lenders to optimize the cash flows that will be generated by the facilities over time”, states Michel Letellier, President and Chief Executive Officer of the Corporation. “Construction is progressing well and the projects remain on time and on budget”, adds Mr. Letellier.

The $491.6 million financing has been arranged by The Manufacturers Life Insurance Company as agent and lead lender, with the Caisse de Dépôt et placement du Québec and The Canada Life Assurance Company as lenders. It comprises three facilities, or tranches:

A $191.6 million construction loan carrying a fixed interest rate of 4.22%; following the start of the facilities’ commercial operations, it will convert into a 25-year term loan and the principal will be amortized over a 20-year period, starting in the sixth year;
A $250 million construction loan carrying a fixed interest rate of 4.46%; following the start of the facilities’ commercial operations, it will convert into a 40-year term loan and the principal will begin to be amortized after the 25-year term loan’s maturity;
A $50 million construction loan carrying a fixed interest rate of 4.46%; following the start of the facilities’ commercial operations, it will convert into a 40-year term loan and its principal will be reimbursed at maturity.

Proceeds of the financing will be used to pay for the two projects’ construction costs, as well as a loss of approximately $68.0 million realized upon settlement of the bond forward contracts used to fix the interest rate on the loans prior to closing and therefore protect the two projects’ expected returns. This loss results from a decrease in benchmark interest rates between the date the bond forwards were entered into (between September and December 2013) and the valuation date (March 17, 2015) and is compensated by lower interest payments for the duration of the loans.

The Boulder Creek and Upper Lillooet River hydroelectric projects are located on Crown land, approximately 70 km northwest of Pemberton, British Columbia. Construction began in 2013 and commercial operation is expected to begin by the end of 2016. Boulder Creek will have an installed capacity of 25.3 MW and an average annual production estimated to reach 92,500 MWh. Upper Lillooet will have an installed capacity of 81.4 MW and an average annual production estimated to reach 334,000 MWh. All of the electricity these facilities will produce is covered by two 40-year fixed-price power purchase agreements with BC Hydro, which were obtained under that province’s 2008 Clean Power Call Request for Proposals and which provide for an annual adjustment to the selling price based on a portion of the Consumer Price Index.

About Innergex Renewable Energy Inc.

Innergex Renewable Energy Inc. is a leading Canadian independent renewable power producer. Active since 1990, the Company develops, owns and operates run-of-river hydroelectric facilities, wind farms and solar photovoltaic farms and carries out its operations in Quebec, Ontario and British Columbia and in Idaho, USA. Its portfolio of assets currently consists of: (i) interests in 33 operating facilities with an aggregate net installed capacity of 687 MW (gross 1,194 MW), including 26 hydroelectric operating facilities, six wind farms, and one solar photovoltaic farm; (ii) interests in five projects under development or under construction with an aggregate net installed capacity of 208 MW (gross 319 MW), for which power purchase agreements have been secured; and (iii) prospective projects with an aggregate net capacity totaling 3,190 MW (gross 3,330 MW). Innergex Renewable Energy Inc. is rated BBB- by S&P. Its shares are listed on the Toronto Stock Exchange under the symbol “INE”.

The Corporation’s strategy for building shareholder value is to develop or acquire high-quality facilities that generate sustainable cash flows and provide an attractive risk-adjusted return on invested capital, and to distribute a stable dividend.

 

For further information: Marie-Josée Privyk, CFA, SIPC, Director – Communications and Sustainable Development, 450-928-2550, ext. 222, mjprivyk@innergex.com, www.innergex.com

Photo courtesy Innergex Renewable Energy Inc