Innergex Power Income Fund increases its installed capacity by 61 %


    LONGUEUIL, QC, Oct. 26 /CNW Telbec/ - Innergex Power Income Fund (IEF.UN)
(the "Fund") announced today that it has reached an agreement with Innergex II
Income Fund ("Innergex II") to acquire its interests in two facilities: the
38% interest in the 109.5-MW Baie-des-Sables wind farm and the 38% interest in
the 100.5-MW Anse-à-Valleau wind farm (the "Transaction") for an acquisition
price of $172.9 million. The acquisitions are subject to usual closing
conditions for transactions of this nature, including regulatory and third
parties approvals and to the closing of an initial public offering of the
Manager of the Fund, Innergex Renewable Energy Inc. (formerly Innergex
Management Inc.)

    Transaction's Highlights

    - Increase the distribution by 3.5 cents per unit to $1.00, on an
      annualized basis, starting as of January 1, 2008;
    - Increase the Fund's total installed capacity by 61% to 210 MW;
    - Increase the anticipated net annual production by 37%, or 226.6 GW-hr,
      to 835 GW-hr;
    - Increase the 2008 anticipated revenues by 44%, from $41 million to
      approximately $59 million, and 2008 anticipated EBITDA by 49%, from
      $31.5 million to approximately $47 million;
    - Increased diversification in terms of energy sources; and
    - Mitigate the effect of seasonality on the Fund's cash flows.

    The Baie-des-Sables wind farm is located near Matane in the province of
Québec. It is a 109.5-MW wind farm of which Innergex II has a 38% financial
interest. The facility benefits from a long-term Power Purchase Agreement
("PPA") with a term of 20 years with Hydro-Québec, expiring in 2026. The
facility was commissioned in November 2006, and is expected to produce
298.3 GW-hr annually (113.4 GW-hr net interest). For the first 9 months of
2007, the Baie-des-Sables wind farm performed 14% above its forecasted
long-term average due to winds proportionately stronger than expected for that
    The Anse-à-Valleau wind farm is located in Gaspé, in the province of
Québec. It is a 100.5-MW wind farm of which Innergex II has a 38% financial
interest. The facility benefits from a long-term PPA with a term of 20 years
with Hydro-Québec, beginning on the commercial in-service date. The facility
is expected to be commissioned in November 2007, and its annual forecasted
long-term average production is 298 GW-hr (113.2 GW-hr net interest).
    The Fund intends to finance the acquisition price of $172.9 million by
issuing 4,724,409 units to Innergex II, representing an amount of
$61.7 million, by assuming $107.6 million in non-recourse debts which are
expected to be outstanding as at December 31, 2007 and by increasing the
Fund's debt by $3.6 million. The interest rate risk of such debts is mitigated
by way of derivative instruments. Innergex Renewable Energy Inc., which is
seeking to conclude an initial public offering before the end of 2007, will
raise proceeds that will be used in part to acquire Innergex II. Upon closing,
Innergex Renewable Energy Inc. will have a 16.1% interest in the Fund and will
remain its manager.
    In connection with the proposed Transaction, the Fund has agreed to
certain amendments, to be effective at Closing, to its management agreements
with the Manager, including: i) the extension of their initial terms from 2023
to 2030; and ii) mutual rights to terminate the agreements upon certain events
and providing that a cash compensation is paid to the Manager.
    The terms of the proposed Transaction were reviewed, with the assistance
of financial, technical and legal advisors, and approved by the independent
members of the Board of Trustees of Innergex Power Trust.
    "These acquisitions are in line with the Fund's strategy to maintain and
increase its distributable cash per unit. It is indeed the most significant
increase in distributions the Fund has announced since its inception. These
two high quality facilities will increase the Fund's assets diversification in
terms of energy sources and will mitigate the seasonality effect on the Fund's
cash flows since the peak production for wind farms does not occur in the same
months as for hydroelectric facilities. We look forward to complete the
acquisitions", remarked Jean La Couture, Chairman of the Board of Trustees of
Innergex Power Trust.


    Innergex Power Income Fund is an open-ended income trust that indirectly
owns ten hydroelectric power generating facilities with a total installed
capacity of 129.9 MW. These facilities are operated and managed by Innergex
Renewable Energy Inc., the Manager, under long-term agreements with the Fund.
    Innergex II Income Fund is a private open-ended trust created in 2001 to
build, own and operate hydroelectric power plants and wind farms in North
America, especially in Canada. Without considering the Baie-des-Sables and the
Anse-à-Valleau wind farms, the Innergex II portfolio of projects consists of
one operating facility (8 MW), interests in nine development projects with
PPAs (gross expected capacity of 565 MW) and 21 prospective projects (gross
expected capacity of 1,638 MW) and is managed by Innergex Renewable Energy
    Innergex Renewable Energy Inc. (formerly known as Innergex Management
Inc.) is a private corporation incorporated in 2002 under the laws of Canada.
The corporation provides management and administrative services to the Fund
and to Innergex II. Innergex Renewable Energy Inc. oversees the development
and operations of the projects. The team at Innergex Renewable Energy Inc. has
been engaged in the development, construction, acquisition, ownership, and
operation of hydroelectric power plants since 1990 and wind farms since 2000.


    Investors should note that some statements in this press release are
forward-looking and may not give full weight to all potential risks and
uncertainties. Forward-looking statements are, by their nature, subject to
risks and uncertainties, and actual results, actions or events could
materially differ from those set forth in the forward-looking statements. All
forward-looking statements are only valid as of the date they were made. The
Fund does not undertake to update forward-looking statements.
    %SEDAR: 00018706EF

For further information:

For further information: Mr. Jean Trudel, MBA, Vice-President - Finance
and Investor Relations, Innergex Renewable Energy Inc., as Manager of the
Fund, (450) 928-2550 ext. 252; Mr. Michel Letellier, MBA, President and Chief
Executive Officer, Innergex Renewable Energy Inc., as Manager of the Fund,
(450) 928-2550 ext. 227;,

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