- Closing of a US$534 million
(CAN$704 million) construction and term financing and a
US$49 million (CAN$65 million) letter
of credit ("LC") facility for the construction and operation of the
329.8 MW Boswell Springs Wind Project
- The project qualifies for the Energy Community PTC Bonus,
which increases PTCs by 10%
- On-site construction activities have started, and contractors
are now fully mobilized on site
- Tax equity investment process is well advanced and expected to
close during Q3 2023
LONGUEUIL, QC, July 14,
2023 /CNW/ - Innergex Renewable Energy Inc. (TSX:
INE) ("Innergex" or the "Corporation") is pleased to announce the
closing of a US$534 million (CAN$704
million) construction financing including a US$203 million (CAN$268 million) 10-year
non-recourse term loan with BNP Paribas, Credit-Agricole CIB,
Export Development Canada, and MUFG Bank, Ltd., acting as Joint
Lead Arrangers, for the construction and operation of the 329.8 MW
Boswell Springs Wind Project (the "Project") located in
Wyoming, United States. Under the Inflation Reduction
Act, the project is potentially eligible for up to 120% of
Production Tax Credits ("PTCs"), which includes a 10% Energy
Community PTC Bonus and a 10% Domestic Content PTC Bonus. The
Project is eligible to benefit from the Energy Community Tax Credit
PTC Bonus due to its location in an "energy community", as defined
in the Inflation Reduction Act. The eligibility for the 10%
Domestic Content PTC Bonus is currently being evaluated, which
should further enhance the profitability of the project.
"We are very pleased with the terms of this financing as it
demonstrates the strong market confidence in Innergex's technical
and financial abilities to develop high-quality and
well-structured assets that generate attractive cash flows," said
Michel Letellier, President and
Chief Executive Officer of Innergex. "In addition, the passage of
the Inflation Reduction Act brings more competitiveness to the
renewable energy sector than ever before by providing bonus credits
for certain clean energy projects. In the case of Boswell Springs,
we were pleased to learn that the project is eligible for the
Energy Community PTC Bonus, and we decided to seize the opportunity
to finance the bonus credits to substantially improve the
investment economics, over and above associated cost increases."
The procurement of wind turbine generators from GE Vernova's
onshore wind business has been secured and the permitting
process has been completed. The EPC contracts have been executed
with Mortenson to act as the balance of plant contractor for the
wind farm and AEI as the EPC contractor for the transmission line.
Construction teams are now fully mobilized on the site and have
begun work on both the balance of plant and generation line.
Total construction costs of the Boswell Springs Wind Project
have been revised to include financing costs related to the Energy
Community PTC Bonus qualification and additional construction and
development costs. Total construction costs are expected to amount
to US$576 million
(CAN$760 million), of which US$103
million (CAN$136 million) has already been funded through
Innergex's revolving credit facilities. A substantial portion of
the first drawdown under the Boswell Springs construction loan will
refund equity over contributed by Innergex and be applied as a
repayment of the revolving credit facility. The process of securing
a tax equity commitment is well advanced and expected to close
during Q3 2023.
Operating cash flows from the Boswell Springs Wind Project are
expected to reach approximately US$22 million (CAN$29 million)
on an annual basis. In addition, the project is expected to benefit
from 110% of the PTCs which should contribute an annual
approximative US$42 million (CAN$55
million), indexed to inflation over a 10-year period, including the
10% Energy Community PTC Bonus.
The electricity to be produced by the Boswell Springs Wind
Project will be sold under a 30-year, 320 MW busbar power purchase
agreement signed with PacifiCorp, a Berkshire Hathaway subsidiary.
The commercial operation date is scheduled for Q4 2024.
About Innergex Renewable Energy Inc.
For over
30 years, Innergex has believed in a world where abundant renewable
energy promotes healthier communities and creates shared
prosperity. As an independent renewable power producer which
develops, acquires, owns and operates hydroelectric facilities,
wind farms, solar farms and energy storage facilities, Innergex is
convinced that generating power from renewable sources will lead
the way to a better world. Innergex conducts operations in
Canada, the United States, France and Chile and manages a large portfolio of
high-quality assets currently consisting of interests in 87
operating facilities with an aggregate net installed capacity of
3,692 MW (gross 4,243 MW) and an energy storage capacity of 159
MWh, including 40 hydroelectric facilities, 35 wind
facilities, 11 solar facilities and 1 battery energy storage
facility. Innergex also holds interests in 13 projects under
development with a net installed capacity of 760 MW (gross 849 MW)
and an energy storage capacity of 605 MWh, 5 of which are under
construction, as well as prospective projects at different stages
of development with an aggregate gross installed capacity totalling
8,883 MW. Its approach to building shareholder value is to generate
sustainable cash flows, provide an attractive risk-adjusted return
on invested capital and to distribute a stable dividend.
Cautionary Statement Regarding Forward-Looking
Information
To inform readers of the Corporation's future
prospects, this press release contains forward-looking information
within the meaning of applicable securities laws ("Forward-Looking
Information"), including the Corporation's successful development,
construction and financing (including tax equity funding) of the
projects under construction, sources and impact of funding,
execution of non-recourse project-level financing (including the
timing and amount thereof), and financial benefits and accretion
expected to result from such projects under construction, , and
other statements that are not historical facts. Forward-Looking
Information can generally be identified by the use of words such as
"approximately", "may", "will", "could", "believes", "expects",
"intends", "should", "would", "plans", "potential", "project",
"anticipates", "estimates", "scheduled" or "forecasts", or other
comparable terms that state that certain events will or will not
occur. It represents the projections and expectations of the
Corporation relating to future events or results as of the date of
this press release.
Forward-Looking Information includes future-oriented financial
information or financial outlook within the meaning of securities
laws, including information regarding the Corporation's targeted
production, the estimated targeted revenues, the estimated
costs and schedule, including start of commercial operation for
project under construction, the qualification of U.S. projects for
PTCs and other statements that are not historical facts. Such
information is intended to inform readers of the potential
financial impact of expected results, of the expected commissioning
of Development Projects, of the potential financial impact of
completed and future acquisitions and of the Corporation's ability
to sustain current dividends and to fund its growth. Such
information may not be appropriate for other purposes.
Forward-Looking Information is based on certain key assumptions
made by the Corporation, including, without restriction, those
concerning hydrology, wind regimes and solar irradiation;
performance of operating facilities, acquisitions and commissioned
projects; project performance; availability of capital resources
and timely performance by third parties of contractual obligations;
favourable market conditions for share issuance to support growth
financing; favourable economic and financial market conditions; the
Corporation's success in developing and constructing new
facilities; successful renewal of PPAs; sufficient human resources
to deliver service and execute the capital plan; no significant
event occurring outside the ordinary course of business such as a
natural disaster, pandemic or other calamity; continued maintenance
of information technology infrastructure and no material breach of
cybersecurity.
For more information on the risks and uncertainties that may
cause actual results or performance to be materially different from
those expressed, implied or presented by the forward-looking
information or on the principal assumptions used to derive this
information, please refer to the "Forward-Looking Information"
section of the Management's Discussion and Analysis for the three
months ended March 31, 2023.
SOURCE Innergex Renewable Energy Inc.