National Bank Financial and Sun Life Assurance Co. of Canada, a wholly owned subsidiary of Sun Life Financial, announced Dec. 17 the closing of private placement financings totaling C$390m for a 108-MW portfolio of solar photovoltaic projects being developed by Recurrent Energy in Ontario, Canada.
The portfolio consists of ten solar sites, known as Project Borealis, which is currently under construction and expected to be completed in early 2014. Each of the sites has received an Ontario Feed-in-Tariff (FIT) contract. Upon commissioning, the generated energy will be sold to the Ontario Power Authority at a fixed rate of C44.3 cents per kilowatt hour for the next 20 years.
National Bank Financial and Sun Life Assurance acted as debt co-underwriters for the unrated private placement financings. National Bank Financial also acted as bookrunner on the financings and is acting as administrative agent for the lenders on an ongoing basis. Sun Life Assurance acted as lead lender on the financings. The term of the amortizing debt facilities is construction plus 19 years.
The portfolio of projects is being developed by San Francisco-based Recurrent Energy, which has invested significantly in the Ontario solar market. Upon construction completion, investors Fiera Axium Infrastructure and Metropolitan Life Insurance will act as the new equity sponsors and have agreed to purchase the sites from Recurrent Energy under a forward purchase and sale agreement.
“We are delighted to be part of this significant transaction and pleased to be able to assist Recurrent Energy, MetLife and Fiera Axium in their investments in Ontario’s renewable energy initiatives” said Peter Hepburn, Head and Managing Director of the Infrastructure Finance Group, National Bank Financial. “The underwriting commitment provided by National Bank and Sun Life for both the construction and acquisition loans was a key feature in enabling the transaction to take place.”
“Given Sun Life’s focus on sustainable investment, we were pleased to support the sponsors on the Project Borealis transaction – a clean reliable source of renewable energy for Ontario communities. The innovative structure further highlights the benefits of a customized private placement financing solution” said John Vincent, Senior Managing Director and Head of Project Finance, Sun Life Financial.
The portfolio of projects will use solar modules manufactured by Celestica LLC and will be operated by EDF Renewable Services.