Innergex Achieves Tax Equity Commitment Close for the Boswell Springs Wind Project
- Closing of a US$322.7 million (CAN$441.6 million) upfront tax equity commitment and PAY-GO payments with J.P. Morgan and Capital One
- On-site construction activities are progressing very well and according to the schedule
LONGUEUIL, Quebec, October 19, 2023 – Innergex Renewable Energy Inc. (TSX: INE) (“Innergex” or the “Corporation”) is pleased to announce the closing of a US$322.7 million (CAN$441.6 million) tax equity commitment (“Upfront Investment”) with J.P. Morgan and Capital One (the “Tax Equity Investors”) for the 329.8 MW Boswell Springs Wind Project located in Wyoming, United States (the “Project”). The Tax Equity Investors have committed to fund the Upfront Investment at substantial completion and to make cash payments as production tax credits are generated (“PAY-GO”) over a 10-year period.
“This tax equity commitment completes the financing activities of the Boswell Springs project, one of Innergex’s short-term funding initiatives to increase the Corporation’s liquidity,” said Michel Letellier, President and Chief Executive Officer of Innergex. “We are proud to partner with J.P. Morgan and Capital One for the first time as tax equity investors as this demonstrates Innergex’s ability to attract new investors. We have all the necessary financial support to successfully build this large wind project by the end of 2024. Progress on site is well underway and our teams are dedicated to delivering the project within the given timeframe. Over the years, Innergex has proven its expertise in creating accretive financial structures that include non-recourse construction financings and tax equity investments to support its expansion. We believe that we are well positioned to continue our growth as a developer of profitable renewable energy projects in the United States and our other key markets.”
The construction of Boswell Springs is progressing well, with the 2023 activities coming to an end. The installation of the collection system is 90% complete, while splicing is underway. Work on the access roads is complete, and all foundations have been poured. The generation-tie line is also advancing, with over 80% of structures in place and stringing of the wire at 61%.
On July 14, 2023, Innergex announced the closing of a US$534 million (CAN$730 million) construction financing including a US$322.7 million (CAN$441.6 million) tax equity bridge loan and a US$203 million (CAN$278 million) 10-year non-recourse term loan for the Boswell Springs Wind Project, of which US$103 million (CAN$141 million) was used to refund equity over contributed by Innergex and reduce its corporate revolving credit facility.
Operating cash flows from the Boswell Springs Wind Project are expected to reach approximately US$22 million (CAN$30 million) on an annual basis. In addition, the project is expected to benefit from 110% of the Production Tax Credits (“PTCs”), which should contribute an annual approximative US$42 million (CAN$57 million), indexed to inflation over a 10-year period, including the 10% Energy Community PTC Bonus. The Project is currently planned to also be eligible for the 10% Domestic Content PTC Bonus which could contribute annually an additional $3.8 million (CAN$5.2 million) indexed to inflation over 10-year period and be eligible for transferability.
The electricity to be produced by the Boswell Springs Wind Project will be sold under a 30-year, 320 MW busbar power purchase agreement signed with PacifiCorp, a Berkshire Hathaway subsidiary. The commercial operation date is scheduled for Q4 2024.
About Innergex Renewable Energy Inc.
For over 30 years, Innergex has believed in a world where abundant renewable energy promotes healthier communities and creates shared prosperity, which led to Innergex being recognized as Canada’s best corporate citizens in 2023 by Corporate Knights. 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 85 operating facilities with an aggregate net installed capacity of 3,676 MW (gross 4,226 MW) and an energy storage capacity of 159 MWh, including 40 hydroelectric facilities, 35 wind facilities, 9 solar facilities and 1 battery energy storage facility. Innergex also holds interests in 13 projects under development with a net installed capacity of 760 MW (gross 849 MW) and an energy storage capacity of 605 MWh, 5 of which are under construction, as well as prospective projects at different stages of development with an aggregate gross installed capacity totalling 9,352 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.
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 successful construction and financing (including tax equity funding) of the projects under construction, 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 targeted Operating Cash Flows, the estimated start of commercial operation of the project, the qualification of U.S. projects for PTCs 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 the Corporation, including, without restriction, those concerning hydrology, wind regimes and solar irradiation; performance of operating facilities, acquisitions and commissioned projects; project performance; availability of capital resources and timely performance by third parties of contractual obligations; favourable market conditions for share issuance to support growth financing; favourable economic and financial market conditions; the Corporation’s success in developing and constructing new facilities; successful renewal of PPAs; sufficient human resources to deliver service and execute the capital plan; no significant event occurring outside the ordinary course of business such as a natural disaster, pandemic or other calamity; continued maintenance of information technology infrastructure and no material breach of cybersecurity.
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 Management’s Discussion and Analysis for the three months ended June 30, 2023.
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