Innergex Renewable Energy Inc. and its joint venture partner Ledcor Power Group Ltd. have closed $491.6 million in financing for the Boulder Creek and Upper Lillooet River run-of-river hydroelectric projects located in British Columbia, Canada.
The financing was came from The Manufacturers Life Insurance Co, Caisse de Depot et placement du Quebec and The Canada Life Assurance Co. Proceeds of the financing will be used to pay for the two projects’ construction costs, as well as a loss of approximately US$68 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 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,” said Innegex CEO Michel Letellier, “Construction is progressing well and the projects remain on time and on budget.”
The development company for the two projects is Creek Power Inc., a joint venture between Innergex, which owns 66.67% and Ledcor with 33.33%. Both projects are located 70 kilometres 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 megawatts and Upper Lillooet 81.4MW. 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.