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Innergex continues acquisition of Canadian hydropower assets

Canadian power producer Innergex Renewable Energy Inc. has signed a purchase and sale agreement that will give it a 70% interest in Hydromega Group's 40.6-MW Magpie hydroelectric facility.

The hydropower complex, located in the Minganie Regional County Municipality in the northeastern part of the territory, is a run-of-river project that began commercial operations in 2007.

"Innergex continues to execute its strategy of expanding its long-term production and strengthening its growth prospects, creating a balanced mix of sites in operation and under development across Canada," says Michel Letellier, Innergex president and chief executive officer.

Innergex has been aggressive in its Canadian expansion in recent months. HydroWorld.com reported in July that the company had closed financing for a 49.9-MW project on Kwoiek Creek in British Columbia, and it purchased two hydropower plants from the Capital Power Corporation in June. Innergex also announced its acquisition of Quebec-based hydro developer Cloudworks Energy in April 2011.

Energy produced by the Magpie plant is sold to Hydro-Quebec, as per a 25-year power-purchase agreement.

Innergex says the acquisition will cost the company about US$30 million, plus an additional $51.5 million in assumed project-level debt.

The deal will be financed by a $122.46 million private placement of common shares brokered by the Caisse de depot et placement du Quebec and another unnamed institution.

"We consider their investment as recognition of our accomplishments and a vote of confidence in our long-term growth prospects," Letellier says.

The corporation and Hydromega have also signed a letter of intent expressing Innergex's interest in six other sites, including the 30.5-MW Sainte-Marguerite hydropower plant in Quebec; and Big Beaver Falls, Camp Three Rapids, White Otter Falls, Old Woman Falls and Dokis in Ontario.

Sainte-Marguerite is already in operation, with its output sold to Hydro-Quebec.

Four of the Ontario projects are under construction and will combine for a total installed capacity of 22 MW when completed. Big Beaver Falls and Camp Three Rapids are expected to be complete by the end of this year, with White Otter Falls and Old Woman Falls in operation by spring 2013. Power produced by all four will be sold to the Ontario Power Authority under 40-year power purchase agreements.

Energy from the Dokis plant will also be sold to Ontario Power Authority under a 40-year power purchase agreement. Construction on the project is expected to begin by the end of 2012, with commissioning in 2014.

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