CALGARY, AB, Dec. 23, 2020 /PRNewswire/ - TransAlta Renewables
Inc. ("TransAlta Renewables" or the "Company") (TSX:
RNW) announced that it had entered into definitive agreements
for the acquisition of three assets from TransAlta Corporation
("TransAlta") (TSX: TA) consisting of:
- a 100 per cent direct interest in the 207 MW Windrise wind
project located in the Municipal District of Willow Creek, Alberta;
- a 49 per cent economic interest in the 137 MW Skookumchuck wind
facility in operation located across Thurston and Lewis Counties in Washington State; and
- a 100 per cent economic interest in the 29 MW Ada cogeneration
facility in operation located in Ada,
Michigan.
"We are pleased to announce our acquisition of Windrise and
economic interests in the Skookumchuck wind and Ada cogeneration assets. This enhances
our position in the renewables sector in both Canada and the US, launches on-site generation
in the US and further extends the contracted duration of our
cashflows for ongoing distributions to our shareholders as we
continue to target an 80 to 85 per cent payout ratio for our common
share dividends," said John
Kousinioris, President of TransAlta Renewables.
The total acquisition price for the portfolio of assets is
$439 million, which includes the
remaining construction costs for the Windrise wind project. The
Company will fund the cash consideration for the acquisition and
remaining construction costs with the proceeds from the South
Hedland project financing completed earlier this year. The
transaction will close in separate tranches early in 2021 subject
to the satisfaction of certain closing conditions; however, the
economic benefit of the transaction will be deemed effective as at
January 1, 2021.
Investment Highlights
- Total acquisition value of $359
million payable as of December 31,
2020 along with the obligation to fund the balance of
remaining construction costs for the Windrise wind project;
- Adds 303 MW of net power to installed capacity;
- Long-term contracted portfolio with an average remaining
contract life of 19 years with high investment-grade
counterparties;
- Increases the average contracted life of the fleet from 10
years to 12 years; and
- Annual EBITDA contribution of the assets to the Company is
estimated at approximately $45
million, inclusive of production tax credits.
All figures quoted are in Canadian dollars.
Portfolio Overview
Windrise is a 207 MW wind project under construction
located in Municipal District of Willow
Creek, Alberta. The wind facility has an executed
Renewable Support Agreement with the Alberta Electric System
Operator to provide wind electricity to the province for a 20-year
term. The project is on track to reach commercial operation
during the second half of 2021.
Skookumchuck is a 137 MW
wind facility in operation located across Thurston and
Lewis Counties in Washington
State. The wind facility began commercial operations on
November 7, 2020 and has a 20-year
power purchase agreement with Puget Sound Energy Inc.
TransAlta Renewables will acquire an economic interest in the 49
per cent ownership of TransAlta Corporation (net of tax equity)
through a tracking share structure. Income distributions to
the Company will be net of cash and tax attributes provided to the
tax equity investor.
Ada is a 29 MW
cogeneration facility in operation located in Ada, Michigan. The cogeneration facility
began commercial operations in 1991 and has a power purchase
agreement and steam sale agreement for a remaining five-year period
with Consumers Energy and Amway. TransAlta Renewables will
acquire the economic interest from TransAlta Corporation in the
asset through a tracking share structure.
About TransAlta Renewables Inc.
TransAlta
Renewables is among the largest of any publicly traded renewable
independent power producers ("IPP") in Canada. Our asset
platform and economic interests are diversified in terms of
geography, generation and counterparties and consist of interests
in 23 wind facilities, 13 hydroelectric facilities, seven natural
gas generation facilities, one solar facility, one natural gas
pipeline, and one battery storage project, representing an
ownership interest of 2,537 megawatts of owned generating capacity,
located in the provinces of British
Columbia, Alberta,
Ontario, Québec, New Brunswick, the States of Wyoming, Massachusetts, Minnesota and the State of Western
Australia. Our objectives are to (i) provide stable,
consistent returns for investors through the ownership of, and
investment in, highly contracted renewable and natural gas power
generation and other infrastructure assets that provide stable cash
flow primarily through long-term contracts with strong
counterparties; (ii) pursue and capitalize on strategic growth
opportunities in the renewable and natural gas power generation and
other infrastructure sectors; (iii) maintain diversity in terms of
geography, generation and counterparties; and (iv) pay out 80 to 85
per cent of cash available for distribution to the shareholders of
the Company on an annual basis.
Cautionary Statement Regarding Forward-Looking
Information
This news release contains
forward-looking statements within the meaning of applicable
securities laws. The use of any of the words "expect",
"anticipate", "continue", "estimate", "may", "will", "project",
"should", "propose", "plans", "intends" and similar expressions are
intended to identify forward-looking information or statements.
More particularly, and without limitation, this news release
contains forward-looking statements and information relating
to: the Company's acquisition of the Windrise wind project
and economic interests in the Ada
cogeneration facility and the 49% interest in the Skookumchuck facility; the timing of closing
the acquisition and satisfaction of closing conditions; the
benefits of the transaction, including the extension of the
contracted duration of cashflows; and the annual
EBITDA contribution to TransAlta Renewables'
results. These forward-looking statements are based on
a number of assumptions considered by the Company to be reasonable
as of the date of this news release, and are subject to a number of
risks and uncertainties that may cause actual performance, events
or results to differ materially from those contemplated by the
forward-looking statements, which include: construction
risks at Windrise, including cost overruns or project delays,
including those that may be caused by force majeure or related to
COVID-19; competitive factors in the renewable power
industry; technology risks; changes in economic and market
conditions; changes in laws and regulations; and other risks and
uncertainties discussed in the Company's Annual Information Form
and Management's Discussion and Analysis, filed under the Company's
profile with the Canadian securities regulators on www.sedar.com.
Readers are cautioned not to place undue reliance on this
forward-looking information, which is given as of the date it is
expressed in this news release. The Company undertakes no
obligation to update or revise any forward-looking information
except as required by law.
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SOURCE TransAlta Renewables Inc