Umbata Falls (23 megawatt (MW)) and Carleton (109.5 MW) started operations in fourth quarter of 2008.
Ashlu Creek (49.9 MW) to be completed by year end 2009.
Carleton, Umbata Falls and Ashlu Creek executed ecoENERGY Initiative agreements.
Fitzsimmons Creek (7.5 MW) on schedule for completion by year end 2010.
Five hydro projects (195 MW) submitted to the 2008 BC Hydro Clean Power Call.
The corporation’s CAD5.9 million revenues benefited from the contribution of the Glen Miller facility (8 MW of net installed capacity) for a full year and from the start of commercial operations of the Umbata Falls and Carleton facilities in November 2008.
In 2008, the corporation also received CAD2.2 million in management fees from Innergex Power Income Fund (the “Fund”). The corporation provides management and administrative services to the Fund and its subsidiaries under long-term agreements. As such, the corporation supervised the operation and maintenance of 10 operating hydroelectric facilities and two operating wind farms owned by the Fund, having an aggregate net installed capacity of 210 MW (gross 340 MW).
The corporation holds 4,724,409 units of the Fund, representing 16.1 % of the outstanding units of the Fund. During 2008, the corporation received CAD4.7 million in distributions from the Fund, related to its 16.1 % interest. During 2008, the Fund generated 862,394 MW-hr or 103 % of its long-term average.
Two new facilities in commercial operation The Umbata Falls hydroelectric facility and the Carleton wind farm both started commercial operation in November 2008. With an ownership interest of 49 % and 38 %, respectively, the corporation’s net installed capacity increased by 52.9 MW with 11.3 MW at Umbata Falls and 41.6 MW at Carleton. Both facilities were built on budget, with a total aggregate construction cost representing CAD98.4 million (corporation’s share).
The corporation’s share of the total expected revenues from these two facilities for a complete year is around CAD14 million, which will represent a significant contribution to the growth of the corporation.
Significant progress in the construction of two hydro facilities
The corporation is also overseeing the construction of two projects, the Ashlu Creek and Fitzsimmons Creek hydroelectric facilities with expected commercial in-service date in fourth quarter of 2009 and fourth quarter of 2010, respectively. The two facilities will increase the net installed capacity of the corporation by another 55 MW.
Secure long-term financing
In view of the recent turmoil in the financial markets and the growing challenge to close new financing agreements, Innergex is in a comfortable position, considering its debt structure. Stemming from the longterm relationships established with strong financial institutions and high quality projects that can attract funding at reasonable terms and conditions, the corporation has already secured most of the required financing for its facilities in operation or under construction.
The Glen Miller and Umbata Falls hydroelectric facilities have CAD16.5 million and CAD51 million financing in place, respectively, and the corporation announced in November 2008 the closing of a CAD53.4 million non-recourse financing for the Carleton wind farm.
Ashlu Creek’s financing needs are also secured, with a CAD110.0 million non-recourse construction and term loan. The corporation also executed a committed term sheet with a Canadian financial institution for the financing of Fitzsimmons Creek in March 2009. This term sheet is subject to further syndication to obtain the total required financing for the project.
Prospective Projects
With the acquisitions of Innergex II on December 6, 2007 and a 66 2/3% interest in Creek Power Inc. on August 29, 2008, the corporation acquired prospective hydroelectric and wind projects with a net potential installed capacity of more than 1,600 MW (gross 1,800 MW). In November 2008, five prospective hydroelectric projects were submitted to the 2008 BC Hydro Clean Power Call. Results are expected by the end of June 2009.
The corporation is currently engaged in discussions with local communities and First Nations to submit wind projects under the Québec 250 MW Community Wind RFP and the 250 MW Aboriginal Wind RFP, which are expected to be issued in 2009, if the current price of CAD95.00 per MW-hr is adjusted to reflect the increasing construction costs faced by renewable energy developers.
As stated by Michel Letellier, president and chief executive officer of the corporation, “In spite of the financial crisis, Innergex fared well operationally and in terms of its development. With two new facilities in operation and two more under construction, Innergex is moving forward with its business plan. We expect the corporation to continue its progress with the development of projects for which we already secured power purchase agreements, representing a potential net installed capacity of 197.5 MW. Our long-term goal is the development of our prospective projects having a total potential net installed capacity of more than 1,600 MW.”
