On Oct. 23, Ontario Power Generation reached financial close of a C$200m private placement bond offering to fund the re-development and expansion of four hydroelectric generating stations on the lower part of the Mattagami River in northeastern Ontario.
The bonds were issued by Lower Mattagami Energy Limited Partnership, a limited partnership between OPG, as the sole general partner, and LM Energy Inc., a wholly-owned subsidiary of OPG. LMELP reached financial close of the C$200m private placement issue of senior secured bonds at a fixed 2.228% annual interest rate due Oct. 23, 2017, the utility noted in an Oct. 24 statement.
This is the third of several private placement issues of senior secured bonds planned to be used to refinance commercial paper or other indebtedness, which collectively will complete the forecast C$1.9bn debt financing required for the project, OPG added.
The redevelopment and expansion of the four hydroelectric stations will utilize available water more efficiently, and increase production of clean and renewable electricity. One additional unit will be added to each of three existing stations – Little Long, Harmon and Kipling. The fourth station – Smoky Falls – will be decommissioned and replaced by a new, three-unit, 267-MW station. The expanded Lower Mattagami River Complex will have a total generating capacity of 924 MW, which represents an increase of 438 MW.
Construction began in June 2010, with completion in 2015. This project is supported by a long-term Hydroelectric Energy Supply Agreement with the Ontario Power Authority. The entities that form the Lower Mattagami River Complex are currently wholly-owned (directly or indirectly) by OPG. The Moose Cree First Nation has an option to acquire up to 25% of the entity that will own the expansion assets – the additional units at each of the three existing stations and the new Smoky Falls station.
This is one of many projects where OPG is looking to develop new generating capacity to replace the last of its coal-fired generation, which is due to shut in 2014 under a provincial effort to reduce greenhouse gas emissions.