The power projects include Sarnia cogeneration plant and Ragged Chute hydro facility in Ontario, as well as Le Nordais wind farm in Quebec.
Combined power generation capacity of these plants is 611MW.
TransAlta Renewables expects the investment to increase cash available for distribution (CAFD) per share of approximate 3% in over the near term and longer term periods.
The transaction involves issuing $175m in common shares by TransAlta Renewables to TransAlta and $215m in convertible unsecured subordinated debentures.
In order to finance the cash portion of the investment, TransAlta Renewables signed a C$150m ($112m) bought deal.
Meanwhile, TransAlta Renewables has also agreed to sell 8% stake in the company to Alberta Investment Management (AIMCo) for C$200m.
AIMCo CEO Kevin Uebelein said: "TransAlta has set forth a bold transition plan that will see it become one of North America’s preeminent clean power companies."
The deal is planned to be completed on 26 November.
TransAlta Renewables said that the transaction, which represents second assets acquisition from TransAlta this year, is as part of its plan to buy assets which can give stable cash flows.
TransAlta Renewables president Brett Gellner said: "The enhanced cash flow per share from this Transaction supports a dividend increase of $0.04 per share to $0.88 per share annually upon completion of the Transaction, which is in addition to the further dividend increase of approximately 6% to 7% we expect when South Hedland is fully commissioned in mid-2017. The Portfolio is highly contracted and provides additional cash flow diversification.
"The associated Offering and AIMCo Investment will increase the float size of the Company and improve liquidity for investors and we are pleased to have AIMCo joining as a key shareholder of TransAlta Renewables."
Image: TransAlta Renewables intends to acquire assets which have stable cash flows at accretive valuations. Photo: courtesy of dan/ FreeDigitalPhotos.net.
