Updated: Innergex buys out JV partner in Québec

CANADA: Innergex has become the sole owner of five wind farms in Québec after buying out its partner's interests in the joint venture.

Part of the Cartier Wind Farms cluster in Québec, Canada (pic: Innergex)

This story was first published on 2 August, 2018, when the acquisition was first announced. It was updated on 24 October, when the deal was completed.

The developer was in a joint venture (JV) with energy infrastructure company TransCanada, which had built five wind farms with a combined capacity of 589.5MW.

It has now bought TransCanada’s 62% stake in the 109.5MW Baie-des-Sables, 109.5MW Carleton, two-phase 211.5MW Gros-Morne, 100.5MW L’Anse-à-Valleau, and 58.5MW Montagne Sèche wind farms, increasing its net installed capacity by 366MW. The projects are collectively known as Cartier Wind Farms.

Innergex also bought its partner’s 50% stake in the operations and maintenance (O&M) team for the projects — Cartier Operating Entities — adding 46 employees to the company.

When it first announced the deal in August, the developer stated that it aims to find a partner to acquire a stake in Cartier Wind Farms to "increase shareholders’ return while optimising the investment structure", but will maintain full ownership of Cartier Operating Entities.

Innergex secured TransCanada’s interests in the JV for approximately C$620 million (US$473 million).

Two leading Canadian banks, BMO Capital Markets and TD Securities provided financing for Innergex to backstop its existing credit facilities and provide two short-term credit facilities to cover the purchase price and transaction costs.

An initial one-year term credit facility of C$400 million will allow Innergex to establish non-recourse long-term financing throughout the projects’ life-cycles. Discussions with long-term lenders are at an advanced stage and closing of the non-recourse long-term financing of the projects is expected in the coming months, Innergex stated.

A second one-year term credit facility of C$228 million will be repaid through the strategic divestment of selected assets, the developer stated. The company’s management intends to investigate various options and expects to complete this divestment within a year, it added.

All of the electricity from the Cartier Wind Farms is sold through 20-year power purchase agreements (PPAs) with utility Hydro-Québec.

Innergex aims to have 2GW of net installed capacity comprising hydro, solar, geothermal and wind projects by 2020. CEO Michael Letellier said the company should surpass this, reaching 2.5GW by 2020.

The developer completed a deal to acquire fellow Canadian company Alterra Power in February 2018, boosting its net operational capacity by 364MW

Innergex currently manages a portfolio with a net installed capacity of 1,725MW and has an interests in a further five projects with a net installed capacity of 719MW.