SkyPower Wind Energy Fund LP Files Interim Results and Provides Project Update



    TORONTO, Aug. 29 /CNW/ - SkyPower Wind Energy Fund LP (the "Partnership")
announces it has filed with Canadian securities regulators its interim
consolidated financial statements and Management's Discussion and Analysis
("MD&A") for the three and six month periods ended June 30, 2007. These
documents will be available at www.sedar.com and
www.skypowerwindenergyfund.com.

    
    Selected Financial Information and Results of Operations

    -------------------------------------------------------------------------
                                  THREE MONTHS ENDED        SIX MONTHS ENDED
                                        JUNE 30                  JUNE 30
                                      (UNAUDITED)              (UNAUDITED)
    -------------------------------------------------------------------------
                                    2007        2006        2007        2006
    -------------------------------------------------------------------------
    Interest Income              $56,980    $313,494    $150,032    $591,232
    -------------------------------------------------------------------------
    Net Loss before Income
     Taxes                     $(424,736)  $(150,718)  $(776,634)  $(205,381)
    -------------------------------------------------------------------------
    Future Income Tax Recovery  $296,824    $249,333    $296,824    $249,333
    -------------------------------------------------------------------------
    Net (Loss) Income          $(127,912)    $98,615   $(479,810)    $43,952
    -------------------------------------------------------------------------
    Net (Loss) Income Per Unit    ($0.02)      $0.01      $(0.06)      $0.01
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                                       JUNE 30, 2007       DECEMBER 31, 2006
                                          (UNAUDITED)
    -------------------------------------------------------------------------
    Total Assets                        $248,932,225            $103,654,000
    -------------------------------------------------------------------------
    

    For the three month periods ended June 30, 2007 and 2006, the Partnership
incurred a net loss of $127,912 and net income of $98,615, respectively, and
earned $56,980 and $313,494 in interest income on short-term investments. The
decrease in interest income of $256,514 is a result of lower cash and cash
equivalents balance as at June 30, 2007. In the three month period ended
June 30, 2007, expenses included management and directors' fees of $172,802,
administrative costs comprised primarily of professional fees which include
audit, tax and advisory services and legal fees of $148,979 and capital taxes
in Terrawinds of $159,935. In the three month comparative period ended
June 30, 2006, expenses included management and directors' fees of $179,426,
administrative costs of $230,142 and capital taxes of $54,644. Capital tax has
increased as a result of the increase in the assets of the Partnership. Also,
the second quarter results in 2007 and 2006 included a non-cash future income
tax recovery of $296,824 and $249,333, respectively, related to changes in
future federal and provincial income tax rates.
    For the six month periods ended June 30, 2007 and 2006, the Partnership
incurred a net loss of $479,810 and net income of $43,952, respectively, and
earned $150,032 and $591,232 in interest income on short-term investments. The
decrease in interest income of $441,200 is a result of lower cash and cash
equivalents balance as at June 30, 2007. In the six month period ended
June 30, 2007, expenses included management and directors' fees of $332,240,
administrative costs comprised primarily of professional fees which include
audit, tax and advisory services and legal fees of $296,379 and capital taxes
in Terrawinds of $298,047. In the six month comparative period ended June 30,
2006, expenses included management and directors' fees of $330,678,
administrative costs of $359,010 and capital taxes of $106,925. Capital tax
has increased as a result of the increase in the assets of the Partnership.
Also, the second quarter results in 2007 and 2006 included a non-cash future
income tax recovery of $296,824 and $249,333, respectively, related to changes
in future federal and provincial income tax rates.

    Overview

    During the three month period ended June 30, 2007 and subsequent to the
period end, the following significant events have occurred:

    
    -   As a result of the ongoing analysis of the revised wind turbine
        layout and associated energy output Terrawinds has reduced the
        overall size of the Facility from 114 wind turbines to 111 wind
        turbines. Terrawinds now expects to construct up to 22 wind turbines
        in the CRCE Phase for purposes of conducting a 120-day test (the
        "Test") and, if the Test is successful, construct and operate the
        balance of the 111 wind turbines (the "Infill Phase") to create a
        166.5 MW Facility. The Partnership and Terrawinds are currently
        considering alternatives for the additional 23 wind turbines it has
        purchased under the Turbine Supply Agreement.

    -   Terrawinds has received both its CPTAQ and Environmental approval for
        the CRCE Phase and has applied for the construction permits required
        for the CRCE Phase.

    -   Terrawinds has finalized the negotiations with the MRC and
        municipalities and has entered into a Rights-of-Way agreement for the
        Facility.

    -   Construction of the substation that will connect the Facility to the
        electrical power grid is substantially complete and Terrawinds has
        taken delivery of the CRCE Phase wind turbines.
    

    Outlook

    The delays experienced on the project to date and the extensive revisions
to the layout, engineering and construction plan for the Facility have added
significantly to the costs of the project. In addition, the estimated wind
resource assessment and energy output associated with the revised wind turbine
layout, which is now substantially complete, is lower than originally
anticipated. The Partnership is continuing to assess the revised wind resource
reports as well as the revised engineering and design for the Facility, the
revised construction schedule and construction costs and the overall economics
of the project. In addition, the Partnership is in discussions with various
parties to secure accommodations, amendments and revisions to various
agreements and arrangements, financial and otherwise, that are required to
achieve the necessary economics for the Facility. Based on management's
current view of timing, construction for the CRCE Phase must commence no later
than the beginning of the fourth quarter of 2007 in order to incur sufficient
Canadian Exploration Expense ("CEE") before December 31, 2007 and to minimize
any additional construction costs that may arise in connection with a
condensed construction schedule. It is important that the necessary
amendments, accommodations and revisions are agreed to and implemented
promptly in order to achieve that objective.
    Terrawinds is continuing to work with its senior lenders and their
independent engineers to complete the necessary engineering, wind, financial
and contractual due diligence for the CRCE Phase on the basis of the revised
layout, as well as considering the necessary accommodations, amendments and
revisions to existing contractual arrangements, in order to satisfy the
conditions precedent in the existing credit facilities for the CRCE Phase
financing. In addition, the recent adverse developments in the credit markets
may increase the costs associated with the financing for the Facility. If
Terrawinds is unable to secure the necessary contractual accommodations and
amendments to achieve the necessary project economics required by the senior
lender by October 31, 2007, the current credit facilities will become due and
payable at that time.
    The independent directors of the Board and the Special Liquidity
Committee of the Fund have engaged Credit Suisse Securities (Canada) Inc. to
assist the Board in evaluating its strategic options in light of the current
status of the Project.
    In July 2007, Robert Carillo, a Director of the Partnership and
Terrawinds resigned and joined SkyPower Corp. (the parent company of the
General Partner to the Partnership) in a business development role. Gary
Solway, a Partner at Bennett Jones LLP, has joined the Board as an interim
director, including replacing Mr. Carillo on the Audit, Governance and Special
Liquidity Committees.
    The Partnership continues to believe that proceeding to secure the
necessary contractual accommodations and amendments required to complete the
Facility is the most appropriate means of maximizing ultimate unit holder
value. Failure to obtain the remaining permits and regulatory approvals, to
secure any necessary contractual accommodations, amendments or revisions to
arrangements, financial and otherwise, to satisfy the conditions precedent in
the current credit facility for the CRCE Phase or to secure any additional
financing required to complete the CRCE and Infill Phases of the Facility or
failure of the CRCE Test Phase or other events could result in a halt to
construction of the Facility or could otherwise have a material adverse effect
on the Partnership.

    About SkyPower Wind Energy Fund LP

    The Partnership has invested in the common shares, including flow-through
shares, of Terrawinds Resources Corp., a Canadian corporation that will
construct and operate approximately 111 wind turbines, including up to 22 test
wind turbines (the "CRCE Phase") for purposes of conducting a 120-day test
(the "Test") and, if successful, construct and operate the balance of the 111
wind turbines (the "Infill Phase") to create a 166MW wind energy project near
Rivière-du-Loup, Québec (the "Facility"). The Facility will generate
electricity for sale to Hydro-Québec pursuant to a 21-year power purchase
agreement (the "Power Purchase Agreement").

    Certain statements included in this news release constitute
"Forward-Looking Statements" within the meaning of the Securities Act
(Ontario). Such forward-looking statements involve unknown risks,
uncertainties and other factors including risks of the financial viability of
the Facility, risks in obtaining permits, authorizations, rights-of-way and
approvals required for construction, construction risks, possible failure of
the test phase, risks relating to the Power Purchase Agreement, requirement
for additional financing, failure to obtain statutory or other relief from
certain taxes payable by Terrawinds, availability of government incentive
programs for wind facilities, variable wind resource and associated wind
energy production, turbine design and local climatic conditions, risks
relating to interconnection, reliance on key suppliers, key personnel and one
customer and regulatory risks. These risks and uncertainties as well as
additional information are outlined in the Partnership's 2006 Annual Report
and other continuous disclosure documents available on www.sedar.com. These
risks may cause the actual results, performance or achievements of the
Partnership to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements.
    The forward-looking information contained in this news release represents
the expectations of the SkyPower Wind Energy Fund LP as at August 28, 2007
and, accordingly, is subject to change after such date. However, SkyPower Wind
Energy Fund LP expressly disclaims any intention or obligation to update or
revise any forward-looking information, whether as a result of new
information, future events or otherwise, except as required by applicable law.





For further information:

For further information: David Bacon, Vice President, Finance, or Brian
Moncik, Controller of SkyPower I GP Inc., General Partner to the SkyPower Wind
Energy Fund LP, at (416) 979-4625 or www.skypowerwindenergyfund.com

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