Innergex to sell Icelandic power assets to Macquarie for $305m

Innergex Renewable Energy has struck a deal to offload its entire stake in its Icelandic assets to a Macquarie Infrastructure and Real Assets, a managed European infrastructure fund for $304.8 million (CAD 408.8 million).

In this regard, the Canadian power producer will divest Magma Energy Sweden, which is its wholly-owned subsidiary that has a stake of around 53.9% in Icelandic energy company HS Orka.

The Icelandic energy company owns a couple of operating geothermal power plants- Reykjanes and Svartsengi, which have a combined capacity of 174MW. HS Orka also owns the 10MW Bruarvirkjun run-of-river hydro project, which is currently under construction, along with various renewable power projects in Iceland.

Michel Letellier – Innergex President and CEO said: “This transaction is highly strategic and will create significant value for Innergex as it allows us to focus on our core markets, reimburse our one-year credit facility, deleverage our corporate credit facilities and reduce our exposure to foreign exchange.

“Given Innergex’s non-operatorship role in HS Orka, we viewed the sale of this non-core asset to be consistent with our long-term strategy of developing, owning and operating high-quality renewable energy assets in our core markets and competencies.”

Innergex to sell Icelandic power assets held by Magma Energy Sweden. Photo courtesy of Innergex.

Innergex plans to use the net proceeds from the sale to repay its one-year credit facility worth around $171 million. The credit facility was taken in October 2018 during the acquisition of the remaining stake in the Cartier wind farms and operating entities.

The sale of Magma Energy is expected to be wrapped up in Q2 2019, subject to the satisfaction of closing conditions and third-party consents along with other customary conditions.

Last October, the Canadian power producer acquired the remaining 62% stake in the Cartier wind farms for $464 million from TransCanada. The Cartier wind farms comprise five wind farms in the Gaspe peninsula in Quebec.

Innergex, now holds 100% in the Cartier wind farms have a total capacity of 590MW, which translates to nearly 1780GWh of annual power generation that can meet the power consumption needs of nearly 80,900 Canadian homes.