In the news release, Innergex Announces the Financial Close of
the Hillcrest Solar Project in Ohio,
USA, issued 07-May-2020 by
Innergex Renewable Energy Inc. over CNW, we are advised by the
company that an error occurred in the first paragraph. The
complete, corrected release follows:
CORRECTION - Innergex Announces the Financial Close of the
Hillcrest Solar Project in Ohio, USA
LONGUEUIL, QC, May 7, 2020 /CNW Telbec/ - Innergex
Renewable Energy Inc. (TSX: INE) ("Innergex" or the "Corporation")
is pleased to announce the closing of a construction financing, tax
equity commitment, as well as a 7-year term loan facility for the
200 MW Hillcrest solar photovoltaic project located in Brown County, Ohio. In aggregate, the
US$191.8 million (CAN$270.9 million)
financing was led by CIT's Power and Energy group and includes MUFG
and Mizuho, as well as Wells Fargo as the tax equity investor. The
project was acquired in October 2018
from a joint venture between Open Road Renewables, LLC and MAP
Energy, LLC, the initial developers of the Hillcrest project.
"Securing Hillcrest's financing is an important step forward,
and we are very pleased with the terms of the agreement we have
reached," said Michel Letellier,
President and Chief Executive Officer of Innergex. "This agreement
confirms Innergex's strong ability to raise significant funds even
during the harshest economic environment seen in decades. We
appreciate the support and trust demonstrated by our lenders and
our tax equity partner throughout this process. The construction of
Hillcrest began earlier this year and is progressing well. We have
contingency plans and measures in place to address any problems
that may arise due to the current pandemic, and unless a decree is
issued to halt construction, Hillcrest should come online by the
end of the year."
The total construction costs are estimated at US$279.5 million (CAN$394.8 million) and will be
partly financed through a US$82.0
million (CAN$115.8 million) construction term loan and a
US$109.8 million (CAN$155.1
million) tax equity bridge loan provided by a lender group composed
of CIT Group, MUFG and Mizuho. Innergex will fund the remaining
US$87.7 million (CAN$123.9
million) equity commitment. At commercial operation, Wells Fargo's
Renewable Energy & Environmental Finance group will provide the
tax equity investment used to repay the tax equity bridge loan.
"We are very pleased to again support Innergex as it continues
to expand its portfolio of renewable energy projects," said
Mike Lorusso, managing director and
group head for CIT's Power and Energy business. "Innergex is making
major strides in advancing the growth of renewable power and CIT is
proud to play a role in facilitating that growth."
The project should receive a federal Investment Tax Credit (ITC)
sized to approximately 30% of the project's eligible value.
Hillcrest is expected to produce a gross estimated long-term
average of 413.3 GWh and a US$10.7
million (CAN$15.1 million) projected adjusted EBITDA on
average for the first five years of operation.
A power purchase agreement was signed last November with an
investment grade rated US corporation for Hillcrest's electricity
production, which will be effective when the facility reaches its
commercial operation. Innergex is required not to disclose the
terms and conditions of the agreement until the other party has
made public the information.
About Innergex Renewable Energy Inc.
For 30
years now, 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 and solar farms, 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 68 operating facilities with an aggregate net installed capacity
of 2,588 MW (gross 3,488 MW), including 37 hydroelectric
facilities, 26 wind farms and five solar farms. Innergex also holds
interests in seven projects under development, two of which are
under construction, with a net installed capacity of 301 MW (gross
385 MW), and prospective projects at different stages of
development with an aggregate gross capacity totalling 7,115 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.
Non-IFRS Measures
Some measures referred to in this
press release are not recognized measures under IFRS and therefore
may not be comparable to those presented by other issuers. Innergex
believes that these indicators are important, as they provide
management and the reader with additional information about the
Corporation's production and cash generation capabilities, its
ability to sustain current dividends and dividend increases and its
ability to fund its growth. These indicators also facilitate the
comparison of results over different periods. Free Cash Flow is not
a measure recognized by IFRS and have no standardized meaning
prescribed by IFRS.
References in this document to "Adjusted EBITDA" are to net
earnings (loss) from continuing operations, to which are added
(deducted) provision (recovery) for income tax expenses, finance
cost, depreciation and amortization, other net (revenues) expenses,
share of (earnings) loss of joint ventures and associates and
unrealized net (gain) loss on financial instruments. Other net
revenues related to PTCs are included in Adjusted EBITDA. Innergex
believes that the presentation of this measure enhances the
understanding of the Corporation's operating performance. Readers
are cautioned that Adjusted EBITDA should not be construed as an
alternative to net earnings, as determined in accordance with
IFRS.
Forward-Looking Information Disclaimer
To inform
readers of the Corporation's future prospects, this press release
contains forward-looking information within the meaning of
applicable securities laws, including, but not limited to,
Innergex's business strategy, development, financing and
construction progress of the 200 MW Hillcrest solar photovoltaic
project located in Brown County,
Ohio, and other statements that are not historical facts
("Forward-Looking Information"). Forward-Looking Information can
generally be identified by the use of words such as
"approximately", "may", "will", "could", "believes", "expects",
"intends", "should", "plans", "potential", "project",
"anticipates", "estimates", "scheduled" or "forecasts", or other
comparable terminology that state that certain events will or will
not occur. It represents the estimates, projections and
expectations of the Corporation relating to future events, results
or developments 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, such as expected production and projected Adjusted EBITDA, to
inform readers of the potential financial impact of the expected
commissioning of the Corporation's development projects. Such
information may not be appropriate for other purposes.
Since forward-looking statements address future events and
conditions, they are by their very nature subject to inherent risks
and uncertainties. Actual results could differ materially from
those currently anticipated due to a number of factors and risks.
These include, but are not limited to, the risks associated with
the renewable energy industry in general such as execution of
strategy; ability to develop projects on time and within budget;
capital resources; derivative financial instruments; qualification
for PTCs and ITCs; current economic and financial conditions;
hydrology and wind regimes, solar irradiation; construction, design
and development of new facilities; performance of existing
projects; equipment failure; interest rate and refinancing risk;
currency exchange rates, variation in merchant price of
electricity, financial leverage and restrictive covenants; and
relationships with public utilities. Readers are cautioned that the
foregoing list of factors is not exhaustive. Additional information
on these and other factors that could affect the operations or
financial results of Innergex are included in Innergex's annual
information form available on SEDAR at www.sedar.com.
Forward-Looking Information in this press release is based on
certain key expectations and assumptions made by the Corporation.
The following table outlines Forward-Looking Information contained
in this press release, the principal assumptions used to derive
this information and the principal risks and uncertainties that
could cause actual results to differ materially from this
information.
Principal
Assumptions
|
Principal Risks and
Uncertainties
|
Estimated project
costs, expected obtainment of permits, start of construction, work
conducted and start of commercial operation for Development
Projects or Prospective Projects
For each Development
Project and Prospective Project, the Corporation may provide (where
available) an estimate of potential installed capacity, estimated
project costs, project financing terms and each project's
development and construction schedule, based on its extensive
experience as a developer, in addition to information directly
related to incremental internal costs, site acquisition costs and
financing costs, which are eventually adjusted for the projected
costs and construction schedule provided by the engineering,
procurement and construction ("EPC") contractor retained for the
project.
The Corporation
provides indications based on assumptions regarding its current
strategic positioning and competitive outlook, as well as
scheduling and construction progress, for its Development Projects
and its Prospective Projects, which the Corporation evaluates based
on its experience as a developer.
|
Uncertainties
surrounding development of new facilities
Performance of major
counterparties, such as suppliers or contractors
Delays and cost
overruns in the design and construction of projects
Ability to secure
appropriate land
Obtainment of
permits
Health, safety and
environmental risks
Ability to secure new
PPAs or renew any PPA
Higher-than-expected
inflation
Equipment
supply
Interest rate
fluctuations and financing risk
Risks related to U.S.
PTCs and ITCs, changes in U.S. corporate tax rates and availability
of tax equity financing
Regulatory and
political risks
Natural disaster and
force majeure
Relationships with
stakeholders
Foreign market growth
and development risks
Outcome of insurance
claims
Social acceptance of
renewable energy projects
Ability of the
Corporation to execute its strategy of building shareholder
value
Failure to realize
the anticipated benefits of completed and future
acquisitions
Changes in
governmental support to increase electricity to be generated from
renewable sources by independent power producers
|
Expected
production
For each facility,
the Corporation determines a long-term average annual level of
electricity production ("LTA") over the expected life of the
facility, based on engineers' studies that take into consideration
a number of important factors: for hydroelectricity, the
historically observed flows of the river, the operating head, the
technology employed and the reserved aesthetic and ecological
flows; for wind energy, the historical wind and meteorological
conditions and turbine technology; and for solar energy, the
historical solar irradiation conditions, panel technology and
expected solar panel degradation. Other factors considered include,
without limitation, site topography, installed capacity, energy
losses, operational features and maintenance. Although production
will fluctuate from year to year, over an extended period it should
approach the estimated LTA.
On a consolidated
basis, the Corporation estimates its LTA by adding together the
expected LTAs of all the Operating Facilities that it consolidates.
This consolidation excludes however the facilities which are
accounted for using the equity method.
|
Improper assessment
of water, wind and solar resources and associated electricity
production
Variability in
hydrology, wind regimes and solar irradiation resources
Equipment supply
risk, including failure or unexpected operations and maintenance
activity
Natural disasters and
force majeure
Regulatory and
political risks affecting production
Health, safety and
environmental risks affecting production
Variability of
installation performance and related penalties
Availability and
reliability of transmission systems
Litigation
|
Projected Adjusted
EBITDA
For each facility,
the Corporation estimates annual operating earnings by adding
(deducting) to net earnings (loss) provision (recovery) for income
tax expenses, finance cost, depreciation and amortization, other
net expenses, share of (earnings) loss of joint ventures and
associates and unrealized net (gain) loss on financial
instruments.
|
See principal
assumptions, risks and uncertainties identified under "Expected
Production"
Reliance on
PPAs
Revenues from certain
facilities will vary based on the market (or spot) price of
electricity
Fluctuations
affecting prospective power prices
Changes in general
economic conditions
Ability to secure new
PPAs or renew any PPA
Unexpected
maintenance expenditures
|
Qualification for
PTCs and ITC and expected tax equity investment Flip
Point
For certain
Development Projects in the United States, the Corporation has
conducted on and off-site activities expected to qualify its
Development Projects for PTCs or ITC at the full rate and to obtain
tax equity financing on such a basis. To assess the potential
qualification of a project, the Corporation takes into account the
construction work performed and the timing of such work. The
expected Tax Equity Flip Point for tax equity investment is
determined according to the LTAs and revenues of each such project
and is subject in addition to the related risks mentioned
above.
|
Risks related to U.S.
PTCs and ITC, changes in U.S. corporate tax rates and availability
of tax equity financing
Regulatory and
political risks
Delays and cost
overruns in the design and construction of projects
Obtainment of
permits
|
Although the Corporation believes that the expectations and
assumptions on which Forward-Looking Information is based are
reasonable, readers of this press release are cautioned not to rely
unduly on this Forward-Looking Information since no assurance can
be given that they will prove to be correct. The Corporation does
not undertake any obligation to update or revise any Forward
Looking Information, whether as a result of events or circumstances
occurring after the date of this press release, unless so required
by legislation.
SOURCE Innergex Renewable Energy Inc.