Innergex Renewable Energy Inc. has acquired 100% of the shares of Empresa Eléctrica Licán S.A. (“Licán”), which owns and operates an 18 MW run-of-river hydro facility with a reservoir for daily regulation for up to 3.5 hours. The facility commissioned in 2011 is located on the Licán river, in the region of Los Rios in Chile. Licán was acquired for a total enterprise value of US$40.5 million (CAN$50.5 million) with an equity investment for Innergex of US$16.6 million (CAN$20.6 million), broken down to payment to the shareholders and the partial repayment of the existing debt and other costs.
“It was only last month that we consolidated our presence in Chile with the acquisition of the remaining interests in Energía Llaima. I mentioned at that time how we intend to increase our presence in the region, and the acquisition of Licán supports this growth strategy in South America,” said Michel Letellier, President and Chief Executive Officer of Innergex. “Licán is a high-quality asset with nine years of proven profitability selling its output on the merchant market. The facility features a small reservoir that will allow us to regulate the flow for a continuous energy supply. The acquisition of Licán complements our strategy to diversify our revenue sources by adding capacity revenues to our mix.”
The facility is expected to produce a gross estimated long-term average of 77.8 GWh per year. The asset is expected to reach an Adjusted EBITDA of US$2.1 million (CAN$2.6 million) on average for the first five full years.
The total equity investment of US$16.6 million (CAN$20.6 million) will be financed with cash held in Chile.
