(Montreal) The Apuiat wind farm, located on the North Shore, has obtained funding of 608 million to ensure the construction of the 200 megawatt (MW) project owned equally by Boralex and its partners from the Innu communities.
In a context of more difficult access to credit due to rising interest rates, the announcement demonstrates that there is still an appetite on the part of investors to finance renewable energy projects, underlines the leader of Boralex finances, Bruno Guilmette, in interview. “This type of project always attracts significant interest from lenders. This is not the case for all projects or industries. »
With this announcement, Apuiat managed to secure long-term financing. The financing round includes a $463.5 million construction loan. Once construction is complete, it will be converted to a term loan and amortized over a 25-year period. “That’s a long time for the usual market. I would tell you that it is positive for us. »
Guilmette points out that 75% of the 463.5 million loan is fixed rate, demonstrating the company’s “cautious” approach.
With this financing obtained, Boralex will not need to issue shares to finance the project.
During the most recent quarterly results published in August, Boralex had 313 million in available cash. Management had indicated that it would be able to fund its growth plans over the next year without issuing new shares, barring a major acquisition.
The round of financing announced on Friday does not change anything in this portrait, which took Apuiat into account, specifies Mr. Guilmette in an interview.
The financing also includes a $142.7 million tranche of short-term credit to finance expenses that will eventually be reimbursed by Hydro-Québec, said analyst Rupert Merer of National Bank Financial. “It will reduce the capital needed in the short term, making the financing structure more efficient. »
Another feature of the loan is that it includes a derivative product to hedge variations in interest rates. The “green rebates” of this financial instrument are linked to ESG performance, including the involvement of Innu communities and health and safety criteria. “This is the second time that Boralex has included ESG criteria in its financing,” notes Mr. Guilmette.
Desjardins acts as leader of the banking syndicate financing the project. It includes international institutions, including the Development Bank of South Korea.
Work began in the spring. Boralex anticipates commissioning during the second half of 2024.
Boralex shares were flat, up 1 cent, or 0.01 per cent, at $31.77 Friday on the Toronto Stock Exchange.