The transaction is expected to close in the fourth quarter of 2010, subject to regulatory and other approvals.
Subject to market conditions, Capital Power expects to permanently finance the purchase price of approximately $207m, plus closing costs and normal working capital adjustments, with a combination of debt and equity.
Brian Vaasjo, president and CEO of Capital Power, said: “The Island Generation facility will be the first addition to our fleet made via acquisition, and it demonstrates our commitment to significant growth under strategies encompassing both diversity of fuel types and conservative financial structure.”
The Island Generation Facility is fully-contracted from April 2010 to April 2022 under a tolling arrangement with BC Hydro, which is responsible for the fuel supply to the facility. The facility operates an Alstom GT24B gas turbine and an Alstom steam turbine. It commenced commercial operations in 2002.
