Hydro One Limited (Hydro One) announced that its wholly-owned subsidiary, Hydro One Networks Inc., has entered into an agreement to purchase an approximately 48 per cent interest in the East-West Tie Limited Partnership from affiliates of OMERS Infrastructure Management Inc. (OMERS) and Enbridge Transmission Holdings Inc. (Enbridge). The East-West Tie Limited Partnership owns the East-West Tie Line, a 450-kilometre, 230 kV double-circuit transmission line, regulated by the Ontario Energy Board (OEB), spanning from Wawa to Thunder Bay, along the north shore of Lake Superior.
Hydro One has agreed to purchase its interest in the partnership for $257 million in cash, subject to customary adjustments. The transaction results in a partnership with the remaining owners of the East-West Tie Line – the Bamkushwada Limited Partnership, a consortium of six First Nations, and affiliates of NextEra Energy Canada, LP who own approximately 3.5 per cent and 48 per cent respectively.
“Hydro One has a long history of owning and operating transmission infrastructure in northern Ontario,” said David Lebeter, President and CEO, Hydro One. “By investing in this critical transmission infrastructure, we not only support the reliable delivery of electricity but also contribute to the long-term economic opportunities and shared prosperity in the region.”
“We are very proud of our 12-year partnership with co-shareholders and our collaboration with First Nations to develop and operationalize the East-West Tie,” said Michael Hill, Executive Vice President and Global Head of OMERS Infrastructure. “Hydro One, a prominent Canadian company that already owns and operates more than 90 per cent of Ontario’s transmission network, was considered the best strategic partner to support the company’s continued reliable operations.”
“Enbridge is pleased to have participated alongside our partners in developing and bringing into service the East-West Tie project, with a focus on Indigenous inclusion and participation,” said Matthew Akman, Executive Vice President, Corporate Strategy and President, Power, Enbridge. “Enbridge has enjoyed a strong relationship with NextEra, OMERS and the Bamkushwada Limited Partnership and believe Hydro One’s experience and ownership of other Ontario transmission assets will provide value to the partnership.”
The East-West Tie Line was built in partnership with the Bamkushwada Limited Partnership, which is jointly owned by Fort William First Nation, Michipicoten First Nation, Biigtigong Nishnaabeg (Ojibways of the Pic River First Nation), Pays Plat First Nation, Netmizaaggamig Nishnaabeg (Pic Mobert First Nation) and Red Rock Indian Band.
The line has an OEB-approved rate base of approximately $880 million (100 per cent basis) and connects northwest Ontario communities and industries to Ontario’s electricity grid. The transaction is conditional upon satisfaction of customary closing conditions.
CIBC Capital Markets acted as exclusive financial advisor and Gowling WLG acted as external legal counsel to Hydro One in connection with the transaction. TD Securities acted as exclusive financial advisor and Torys LLP acted as external legal counsel to OMERS and Enbridge in connection with the transaction.
