Hydroelectric, Renewables

OPG, Great Lakes Hydro Income Fund announce closing

TORONTO Ontario Power Generation (OPG) and Great Lakes Hydro Income Fund announced completion of the purchase by the Fund of four hydroelectric generating stations and related water storage facilities located on the Mississagi River, east of Sault Ste. Marie in Northern Ontario, for the purchase price of $340 million.

“Today’s sale increases the competitiveness of the Ontario market as a further 490 MW of generation moves into the hands of our competition,” said Ontario Power Generation President and CEO Ron Osborne. “With the closing of this transaction, OPG continues to demonstrate our commitment to a competitive electricity market and our desire to accelerate meeting our decontrol requirements as set out in our license.”

“The acquisition of the Mississagi facilities furthers our growth strategy of owning and operating long life, low cost generating assets which provide stable and sustainable cash distributions to our unitholders”, said Richard Legault, President and Chief Executive Officer of the Fund. These assets expand the Fund’s total generation capacity to over 900 megawatts (MW) across 15 hydroelectric generating stations, further diversifying the company’s watersheds. The acquisition is partially funded with approximately $200 million in proceeds from the issuance of additional units. Asset specific debt financing will provide the balance of the purchase price.

All the electricity produced by the generating facilities will be sold under a 20 year power purchase agreement to Brascan Power Corporation, the Fund’s sponsor. “We are excited about the acquisition and hope that this represents the first of many opportunities for Brascan Power to expand across North America, including Ontario, as OPG continues to decontrol generating facilities. Going forward, our objective is to continue to grow our power generating business and to become a meaningful participant in this province’s competitive electricity industry”, commented Harry Goldgut, Chief Executive of Brascan Power.

Ontario Power Generation is an Ontario based company, whose principal business is the generation and sale of electricity to customers in Ontario and to interconnected markets. OPG’s goal is to be a premier North American energy company, while operating in a safe, open and environmentally responsible manner. Our focus is on producing reliable electricity from our competitive generation assets; power trading; and commercial energy sales.

Great Lakes Hydro Income Fund owns, operates and manages four integrated hydroelectric power generation, transmission and distribution systems located in Qubec, Ontario, British Columbia and Northern Maine, U.SA, which includes the Mississagi assets. The facilities of the four systems include fifteen hydroelectric generating stations with an installed capacity of 934 megawatts with interconnections to the Qubec, Ontario, British Columbia and New England power grids. Great Lakes Hydro Income Fund units are listed for trading on the Toronto Stock Exchange under the symbol GLH.UN.