UPDATE – Funding complete for Canada’s 196-MW East Toba-Montrose

Plutonic Power Corp. and GE Energy Financial Services announced closing Nov. 8 of a C$470 million (US$496 million) senior secured credit facility for construction of the 196-MW East Toba River Montrose Creek hydroelectric project in British Columbia.

The closing with a syndicate of financial institutions complements C$190 million (US$200 million) in equity and other financial instruments that closed the previous week and completes funding for construction of the C$660 million (US$696 million) project. (HNN 10/30/07)

The project’s credit facilities were co-arranged by Manufacturers Life Insurance Co. and GE Capital markets, a Canadian affiliate of GE Energy Financial, which led a syndicate of lenders to provide 38-year senior secured credit facilities with tenors corresponding to the three-year construction period and 35-year term of the project’s power sale agreement with BC Hydro. Other lenders were Sun Life Assurance Co., Canada Life Assurance Co., Allied Irish Banks plc, and Industrial Alliance Insurance and Financial Services Inc.

As reported in 2006, GE is investing up to C$112 million (US$117 million) to acquire a 49 percent equity and 60 percent economic interest in the project. Following a 35-year term, GE’s economic interests will convert to 49 percent. GE also is offering C$30 million (US$31.5 million) credit to fund Plutonic’s direct costs for increasing the capacity of a 230-kilovolt transmission line.

In return for its contributions, Plutonic has issued to GE 650,000 common share purchase warrants, each of which could be exercised to buy one common share of Plutonic for C$9.03 (US$9.54).

Additionally, GE has provided C$100 million (US$105 million) credit to the partnership. GE has agreed to repay the credit used with proceeds from its equity investment once commercial operation begins.

The project is under construction at sites about 190 kilometers northwest of Vancouver. Operation of the 123-MW East Toba site is scheduled by mid-2010, and 73-MW Montrose by late 2010. Once complete, the project annually could displace an estimated 455,000 tons of greenhouse gases, Plutonic said.

Andritz VA Tech Hydro in October announced in would supply electro-mechanical equipment to the project as part of a C$55 million contract. (HNN 10/19/07)


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