Canada, Environmental, Finance, North America

Ontario Power Generation raises $500 million in green financing to acquire hydro operator

Ontario Power Generation (OPG) has closed a second $500-million green bond issuance, with net proceeds primarily used to finance the recent acquisition of Eagle Creek Renewable Energy LLC, an operator of small waterpower facilities in the U.S. 

OPG’s green bond framework allows for broad use of proceeds to finance and/or refinance eligible projects that offer tangible environmental benefits, such as Eagle Creek. According to a press release, Eagle Creek operates one of the largest hydroelectric fleets in the U.S. Eagle Creek owns 63 small hydropower facilities providing 216 MW of in-service capacity. These plants are located in 13 states across the U.S.

“OPG is proud to use green bonds to finance clean power initiatives,” said Ken Hartwick, OPG’s chief financial officer. “OPG believes low cost, reliable, clean power is fundamental to a healthy environment and a strong low-carbon economy.”

The company entered into a purchase and sale agreement with Eagle Creek to acquire 100% of the company in June 2018. The transaction closed at the end of November 2018, and at that time the purchase price was reported to be US$298 million.

In addition, OPG reported that Eagle Creek will operate independently as a wholly-owned subsidiary of OPG, with its own board of directors and management team. Its financial results will be consolidated into OPG’s financial results.

OPG issued its first green bond in June 2018, with proceeds used to fund several green energy projects, such as the Ranney Falls Generating Station refurbishment.

OPG generates safe, clean, reliable, low-cost power for Ontario. The company owns 66 hydroelectric plants with an in-service capacity of 7,468 MW.