- Thirty-year power purchase agreement with a high quality,
well-capitalized utility becomes effective
- Once constructed, the wind project should contribute to
improving Innergex's free cash flow per share and payout ratio
- Financing and tax equity investment process is progressing
well, and on-site construction activities will ramp up in Q2
2023
LONGUEUIL, QC, Jan. 18,
2023 /CNW Telbec/ - Innergex Renewable Energy Inc.
(TSX: INE) ("Innergex" or the "Corporation") has met all required
conditions for the Boswell Springs power purchase agreement ("PPA")
to become effective. The 30-year, 320 MW busbar PPA was signed with
PacifiCorp, a Berkshire Hathaway subsidiary (S&P credit rating:
A), for the electricity to be produced by the wind project in
eastern Wyoming. The commercial
operation date is scheduled during Q4 2024.
"This is yet another step forward in the realization of our
flagship Boswell Springs project in the
United States, a wind project expected to bring important
returns to Innergex and contribute to improving our payout ratio,"
said Michel Letellier, President and
Chief Executive Officer of Innergex. "We are very pleased with this
agreement with PacifiCorp as it demonstrates our ability to
accompany them on achieving the decarbonization targets of the
western states. We are confident that this PPA will deliver steady
long-term economic and environmental value for both partners."
Total construction costs of the Boswell Springs wind project are
expected to amount to US$544 million
(CAN$728.2 million) of which US$41
million (CAN$54.5 million) has already been invested. Total
financing including tax equity is expected to amount to
approximately 90% of total costs, and the remaining sponsor equity
not already invested will be financed from Innergex's revolving
credit facilities. The financing and tax equity investment process
is progressing well, and on-site construction activities will ramp
up in Q2 2023.
Excluding any financing structure which has yet to be concluded,
operating cash flows from the Boswell Springs wind project are
expected to reach approximately US$22.6
million (CAN$30.3 million) on an annual basis. Also, the
project is expected to benefit from 100% of the US Production Tax
Credits ("PTCs") which should contribute an annual approximative
US$39.2 million (CAN$52.5 million),
which is indexed to inflation over a 10-year period. This PTC
contribution does not take into account any additional potential
bonus credits for domestic content or energy communities. U.S.
Department of the Treasury guidance will be needed to clarify the
domestic content bonus requirements and areas that qualify as
energy communities.
The procurement of GE Renewable Energy wind turbine generators
has been secured, while the permitting process and selection of the
EPC contractor have been completed.
The Boswell Springs project was selected in response to a
competitive solicitation in PacifiCorp's 2020 All-Source Request
for Proposals, issued in July
2020.
Update on 2022 Guidance
The Corporation makes targets using certain assumptions to
provide readers with an indication of its business activities
and future operating performance. The Corporation revised
its targets for fiscal year 2022 on August
3, 2022. On February 22, 2023,
Innergex will release its financial results for the quarter and
fiscal year ended December 31, 2022.
Based on currently available preliminary information, results are
estimated to be in line with Innergex's August 2022 projections except for projections
for Production1 (in GWh) and Free Cash Flow per
Share1. While the financial review remains ongoing,
Production (in GWh) growth target is expected to increase by
approximately 13% compared to the 22% guidance target disclosed in
August 2022. Free Cash Flow per Share
is expected to be of approximately 10% less than the
$0.75 target disclosed in
August 2022. In each case, the
differences mainly result from the exceptionally low hydrology
levels in British Columbia during
the later part of 2022 and from the enactment of the new 2022
Supplementary Budget Act in France which aims to share
additional revenues recognized for certain power purchase contracts
with the French government. We refer the reader to the risks and
uncertainties analysis of Innergex available in the "Risks and
Uncertainties" section of the 2021 Annual Report. Final figures are
subject to completion of the Innergex's annual audit.
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1 These
measures are not recognized measures under IFRS and therefore may
not be comparable to those presented by other issuers. Production
is a key performance indicator for the Corporation that cannot be
reconciled with an IFRS measure. Please refer to the "Non-IFRS
Measures" section of the three- and nine-month periods ended
September 30, 2022 MD&A for more information.
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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 84
operating facilities with an aggregate net installed capacity of
3,634 MW (gross 4,184 MW) and an energy storage capacity of
159 MWh, including 40 hydroelectric facilities, 35 wind
facilities, 8 solar facilities and 1 battery energy storage
facility. Innergex also holds interests in 13 projects under
development with a net installed capacity of 731 MW (gross 768 MW)
and an energy storage capacity of 745 MWh, 3 of which are under
construction, as well as prospective projects at different stages
of development with an aggregate gross installed capacity totaling
8,513 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 growth targets,
successful development, construction and financing (including tax
equity funding) of the projects under construction, sources and
impact of funding, project acquisitions, and strategic, operational
and financial benefits and accretion expected to result from such
acquisitions, business strategy, future development and growth
prospects, business integration, governance, business outlook,
objectives, plans and strategic priorities, 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, targeted Free Cash Flow per Share, the estimated
project size, costs and schedule, including obtainment of permits,
start of construction, work conducted and start of commercial
operation for Development Projects and Prospective Projects, the
Corporation's intent to submit projects under Requests for
Proposals, the qualification of U.S. projects for PTCs and ITCs 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. Please refer to Section 1 - Highlight of the
Management's Discussion and Analysis for the three- and six-month
period ended June 30, 2022 for
details regarding the assumptions used with respect to the 2022
growth targets and to Section 5 - Outlook of the Annual Report for
the 2020-2025 Strategic Plan outlook.
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-
and nine-month periods ended September 30,
2022.
SOURCE Innergex Renewable Energy Inc.