Innergex Renewable Energy Inc. successfully completed a US$803.1 million non-recourse debt refinancing of its portfolio of wholly-owned assets in Chile with the issuance of US$710.0 million green bonds maturing in 2036 – with a lump sum payment of US$139.0 million and a letter of credit facility of US$93.1 million.
The refinanced portfolio is comprised of a combination of solar, wind and hydroelectric assets as well as battery energy storage system (BESS) assets wholly owned by Innergex. The portfolio includes the Licán hydroelectric power station (18 MW), the Mampil hydroelectric power station (55 MW), the Peuchén hydroelectric power station (85 MW) and the Salvador solar power station (68 MW) as well as a BESS project of 50 MW/250 MWh currently in progress. construction and the San Andrés solar park (50.6 MW) and the three Aela wind farms (332 MW), both acquired earlier this year.
Innergex also holds a 55% interest in the Pampa Elvira solar thermal power plant (34 MW) and a 69.5% interest in the Guayacán hydroelectric power plant (12 MW), which were not included in the financed portfolio. In May 2022, Innergex announced that two new utility-scale battery energy storage projects, totaling 85 MW/425 MWh (5 hours per project), are currently under development in Chile.
“The positive reception from investors reflects Innergex’s financial strength and growth prospects in Chile,” said Michel Letellier, President and Chief Executive Officer of Innergex. “Our team was able to obtain more favorable terms on our refinancing, allowing for additional financial flexibility and an extension of the average maturity. This refinancing allows us to unlock the value of our portfolio, optimize our capital structure and align on growing our business as we continue to focus on delivering long-term returns to shareholders.
Overall, the Chilean asset portfolio has been rated investment grade and green bonds have been valued at competitive levels by the US Treasury (UST). The refinancing process will allow Innergex to unlock US$31.7 million (cash at closing) and benefit from a pre-hedging strategy providing additional cash proceeds of US$55.8 million (71.9 million Canadian dollars).
The net proceeds will be used to fund US$176.2 million from the acquisition of the Aela Wind Farms, while US$72.6 million will be used to fund all development activities for the Salvador Energy Storage Project. The remaining balance will be used to repay US$548.7 million of existing debt and other transaction costs.
SMBC and CIBC World Markets Corp respectively acted as placement agent (books) and co-agent for this transaction. SMBC also acted as financial advisor to Innergex in structuring the transaction, as sole green bond coordinator and as sole issuing bank of the letter of credit facility.
Image: The 18 MW Lican run-of-river hydroelectric plant