Innergex Renewable Energy – an independent renewable power producer and a renewable energy project developer, acquired 60 MW Sault Ste. Marie solar portfolio in Ontario from Fengate Asset Management for a purchase price of $50.2 million, along with the assumption of $169.5 million in existing debt.
The Sault Ste. Marie 1, 2, and 3 facilities (SSM1, SSM2, and SSM3, respectively) reached full commissioning between 2010 and 2011 and are fully contracted under long-term ‘Renewable Energy Standard Offer Program’ power purchase agreements with the Independent Electricity System Operator.
The three projects, SSM1 with 20 MW capacity, SSM2 with 30 MW capacity, and SSM3 with 10 MW capacity, have an average remaining contract life of close to nine years.
The projects have achieved a five-year weighted-average availability of 98.5% since their commissioning.
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 four years, cash flow from the operating activities of the portfolio has reached an average of $23 million annually, while free cash flow averaged $7.5 million for the same period.
Innergex expects the portfolio to be immediately accretive based on these averages. The acquisition will be financed with draws from Innergex’s existing credit facility.
The acquisition is expected to close in the first quarter of 2023 and is subject to certain regulatory approvals in Canada, key third-party consents, and other customary closing conditions.
National Bank Financial Inc. acted as financial advisor to Innergex. The acquisition is expected to close in Q1 2023 and is subject to certain regulatory approvals in Canada.
“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.”
In January 2022, Innergex Renewable Energy acquired the 50.6 MW San Andres solar project located in the Atacama Desert in Northern Chile for a total purchase price of $25.7 million.
According to Mercom’s Q4 and Annual Funding and M&A Report, there were 268 large-scale solar project acquisitions in 2022 compared to 280 transactions in 2021. In 2022, about 66 GW of solar projects were acquired, with project developers picking up the most, acquiring 35.7 GW. Solar project acquisitions in terms of GW were at the second-highest level ever.