Quebec — Innergex Renewable Energy announced it has entered into an agreement to acquire the 60 MW Sault Ste. Marie solar portfolio located in northwestern Ontario from Fengate Asset Management for a purchase price of $50.2 million, along with the assumption of $169.5 million of existing debt.
“This is our first acquisition in Canada since 2018, and we are excited to add this collection of high-performing fully contracted solar assets to our portfolio for additional and reliable Canadian dollar cash flows,” said Michel Letellier, President and Chief Executive Officer of Innergex. “The portfolio adds to our geographical diversification and improves our asset mix by adding 60 MW of solar capacity to our existing fleet.”
The Portfolio
The Sault Ste. Marie 1, 2, and 3 facilities (“SSM1”, “SSM2”, “SSM3”, respectively) reached full commissioning between 2010 and 2011 and have achieved an excellent operating track record since then, with a historical 5-year weighted-average availability of 98.5%.
All three facilities are fully contracted under long-term Renewable Energy Standard Offer Program power purchase agreements with the Independent Electricity System Operator (Aa3 rating by Moody’s). The Portfolio has an average remaining contract life of close to nine years.
| SSM1 | SSM2 | SSM3 | |
| Gross installed capacity | 20 MW | 30 MW | 10 MW |
| Commissioned | October 2010 | July 2011 | November 2011 |
| Remaining term of power purchase agreement | 8 years | 9 years | 9 years |
The assets are expected to generate annual revenues of approximately $33.1 million in 2023 while operating, general and administrative expenses are expected to reach approximately $3.1 million during the same period.
Over a historical four-year period, cash flow from operating activities of the Portfolio has reached an average of $23.0 million annually, while Free Cash Flow1 has averaged $7.5 million for the same period.
Innergex expects the Portfolio to be immediately accretive based on these historical averages. The acquisition will be financed with draws from Innergex’s existing revolving credit facility.
Approvals and Timeline
The acquisition is expected to close in Q1 2023 and is subject to certain regulatory approvals in Canada, key third party consents and other customary closing conditions.
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