Specifically 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 projects.
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%).
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.
Michel Letellier, President and Chief Executive Officer of the Corporation, stated:
"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. Construction is progressing well and the projects remain on time and on budget."
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:
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.