Innergex Renewable Energy Inc. (TSX: INE) ("Innergex") and the Pituvik Landholding Corporation ("Pituvik") are proud to announce the closing of a $92.8 million non-recourse construction and term project financing with The Manufacturers Life Insurance Company for the construction of Innavik, a 7.5 MW run-of-river hydroelectric facility on the Inukjuak River near Inukjuak, Nunavik, in northern Quebec (the "Innavik Project").
"Reaching financial close for the Innavik Project initiated by our community in 2008 in order to reduce local greenhouse gas emissions is a historic achievement," said Sarah Lisa Kasudluak, President of Pituvik. "Being able to secure substantial funding demonstrates how, through self-determination, we can carry out projects with significant social, environmental and economic benefits for our people."
"Thanks to an impressive 40-year power purchase agreement with Hydro-Québec Distribution, we were able to negotiate excellent debt repayment terms that will positively impact the facility's cash flow once the project reaches commercial operation," said Michel Letellier, President and Chief Executive Officer of Innergex. "This is exciting news because with the 50-50 partnership structure in place, it means that the Inuit community of Inukjuak will enjoy immediate benefits from the facility's operations, which in turn will foster the economic development of the region."
The total construction costs are estimated at $127.8 million and will be mainly financed through the $92.8 million construction loan. The construction loan will convert into a 40-year term loan carrying a fixed interest rate of 3.95% once the facility reaches commercial operation scheduled in December 2022. The 40-year term loan is set to match the duration of the 40-year power purchase agreement signed with Hydro-Québec Distribution. The remaining $35.0 million will be financed by Innergex and Pituvik.
The Innavik Project is the first partnership between an Inuit corporation and an independent power producer. This innovative project will provide customers of Inukjuak's off-grid system with clean and renewable energy, replacing diesel for their basic electricity and heating needs. Revenues generated by the facility will enable the community to set up local support programs for youth and elders, to develop local initiatives to improve social well-being in the community and to support entrepreneurship.
Construction of the Innavik Project is underway since the construction sector has been allowed to reopen in Nunavik on July 6, 2020 under certain conditions. The Innavik Project is expected to be able to produce a gross estimated long-term average of 54.7 GWh and a $8.6 million projected adjusted EBITDA per year on average for the first five years of operation. The Innavik project is accounted for as a joint venture for Innergex.
For 30 years, Innergex has believed in a world where abundant renewable energy promotes healthier communities and creates shared prosperity. As an independent renewable power producer which develops, acquires, owns and operates hydroelectric facilities, wind farms, solar farms and energy storage facilities, Innergex is convinced that generating power from renewable sources will lead the way to a better world. Innergex conducts operations in Canada, the United States, France and Chile and manages a large portfolio of high-quality assets currently consisting of interests in 75 operating facilities with an aggregate net installed capacity of 2,742 MW (gross 3,694 MW) and an energy storage capacity of 150 MWh, including 37 hydroelectric facilities, 32 wind farms and six solar farms. Innergex also holds interests in ten projects under development, three of which are under construction, with a net installed capacity of 555 MW (gross 629 MW) and an energy storage capacity of 329 MWh, as well as prospective projects at different stages of development with an aggregate gross capacity totaling 6,871 MW. Its approach to building shareholder value is to generate sustainable cash flows, provide an attractive risk-adjusted return on invested capital and to distribute a stable dividend.
Incorporated on January 30, 1979, Pituvik holds title to 521 sq. km. on lands classified as Category I. These lands are held by Pituvik on behalf of the Inukjuaqmiut beneficiaries of the James Bay and Northern Quebec Agreement (JBNQA). In this holding capacity, Pituvik has the right to allow people and organizations to use these lands and for that use is allowed to charge compensation. Pituvik also maintains a beneficiary list on behalf of all Inukjuakmiut. Pituvik is a not-for-profit corporation, however it can create and own for-profit subsidiaries to stimulate local economic growth and job creation.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
To inform readers of the Corporation's future prospects, this press release contains forward-looking information within the meaning of applicable securities laws ("Forward-Looking Information"), including the Corporation's power production, prospective projects, successful development, construction and financing (including tax equity funding) of the projects under construction and the advanced-stage prospective projects, sources and impact of funding, project acquisitions, execution of non-recourse project-level financing (including the timing and amount thereof), and strategic, operational and financial benefits and accretion expected to result from such acquisitions, business strategy, future development and growth prospects (including expected growth opportunities under the Strategic Alliance), business integration, governance, business outlook, objectives, plans and strategic priorities, and other statements that are not historical facts. Forward-Looking Information can generally be identified by the use of words such as "approximately", "may", "will", "could", "believes", "expects", "intends", "should", "would", "plans", "potential", "project", "anticipates", "estimates", "scheduled" or "forecasts", or other comparable terms that state that certain events will or will not occur. It represents the projections and expectations of the Corporation relating to future events or results as of the date of this press release.
Forward-Looking Information includes future-oriented financial information or financial outlook within the meaning of securities laws, including information regarding the Corporation's expected production, the estimated project costs, projected revenues, projected Adjusted EBITDA and projected Adjusted EBITDA Proportionate, Projected Free Cash Flow and intention to pay dividend quarterly, the estimated project size, costs and schedule, including obtainment of permits, start of construction, work conducted and start of commercial operation for Development Projects and Prospective Projects, The Corporation's intent to submit projects under Requests for Proposals, the qualification of U.S. projects for PTCs and ITCs and other statements that are not historical facts. Such information is intended to inform readers of the potential financial impact of expected results, of the expected commissioning of Development Projects, of the potential financial impact of completed and future acquisitions and of the Corporation's ability to sustain current dividends and to fund its growth. Such information may not be appropriate for other purposes.
Forward-looking Information is based on certain key assumptions made by Innergex, including, without restrictions, assumptions concerning project performance, economic, financial and financial market conditions, expectations and assumptions concerning availability of capital resources and timely performance by third-parties of contractual obligations, receipt of regulatory approvals and the divestiture of select assets. Although Innergex believes that the expectations and assumptions on which such forward-looking information is based are reasonable, under the current circumstances, readers are cautioned not to rely unduly on this forward-looking information as no assurance can be given that they will prove to be correct. The forward-looking information contained in this press release is made as of the date hereof and Innergex does not undertake any obligation to update or revise any forward-looking information, whether as a result of events or circumstances occurring after the date hereof, unless so required by law.
For more information on the risks and uncertainties that may cause actual results or performance to be materially different from those expressed, implied or presented by the forward-looking information or on the principal assumptions used to derive this information, please refer to the "Forward-Looking Information" section of the latest Annual Report for more information.