"We are very happy to have succeeded, together with our lenders, in optimizing the terms for this debt and the cash flows that will be generated by the facility over the life of the power purchase agreement", states Michel Letellier, President and Chief Executive Officer of the Corporation. "Construction is progressing well, especially with the recent completion of the tunnel, and the project remains on time and on budget", adds Mr. Letellier.

The $197.2 million financing has been arranged by The Manufacturers Life Insurance Company ("Manulife") as agent and lead lender, with the Caisse de Dépôt et placement du Québec ("CDPQ") as lender. It comprises three facilities, or tranches:

– A $51.0 million construction loan carrying a fixed interest rate of 4.56%; following the start of the facility’s commercial operation, it will convert into a 25-year term loan and the principal will be amortized over an 18-year period, starting in the seventh year;

– A $128.3 million construction loan carrying a fixed interest rate of 4.76%; following the start of the facility’s commercial operation, it will convert into a 40-year term loan and the principal will begin to be amortized after the 25-year term loan’s maturity;

– An $17.9 million construction loan carrying a fixed interest rate of 4.76%; following the start of the facility’s commercial operation, it will convert into a 40-year term loan and its principal will be reimbursed at maturity.

"As arranger and lead lender for this financing, Manulife is very glad to support the development efforts of such an important client as Innergex" states Michael Switt, Managing Director in Manulife’s Project & Infrastructure Finance Group. "This transaction further strengthens our relationships with both Innergex and the Caisse de dépôt et placement du Québec", adds Mr. Switt.

"CDPQ has a long-standing relationship with Innergex, its first investments in this company dating back to 1995. Through this financing, it is once again investing in an industry leader in renewable energy, a key sector that is growing steadily in Canada," says Mr. Marc Cormier, Executive Vice-President, Fixed Income at CDPQ. "This transaction fits perfectly with our strategy as a long-term investor, by both furthering the expansion of a high-performing Quebec company and generating stable and predictable returns for our clients", adds Mr. Cormier.

Proceeds of the financing will be used to pay for the project’s construction costs, as well as a loss of approximately $24.7 million realized upon settlement of the bond forward contracts used to fix the benchmark interest rate for the loans prior to closing and therefore protect the project’s expected return. This loss results from a decrease in benchmark interest rates between the date the bond forwards were entered into (between December 2013 and January 2014) and the valuation date (June 22, 2015) and is compensated by lower interest payments for the duration of the loans.

The Big Silver Creek hydroelectric project is located on Crown land, approximately 40 km north of Harrison Hot Springs, British Columbia. Construction began in 2014 and commercial operation is expected to begin in late 2016. Big Silver Creek will have an installed capacity of 40.6 MW and an average annual production estimated to reach 139,800 MWh.

All of the electricity the facility will produce is covered by a 40-year fixed-price power purchase agreement with BC Hydro, which was obtained under that province’s 2008 Clean Power Call Request for Proposals and which provides for an annual adjustment to the selling price based on a portion of the Consumer Price Index.