Canadian Utilities sells fossil fuel electricity portfolio

28 May 2019 (Last Updated May 28th, 2019 11:14)

Canadian Utilities (CU) has agreed to sell all of its fossil fuel-based electricity generation assets in Canada.

Canadian Utilities (CU) has agreed to sell all of its fossil fuel-based electricity generation assets in Canada.

As part of definitive agreements signed with Energy Capital Partners’ affiliate Heartland Generation, the entire portfolio is valued at nearly $621m (C$835m).

The deal includes CU’s 11 partly or fully owned natural gas-fired and coal-fired electricity generation assets.

Located in Alberta, British Columbia, and Ontario, the portfolio has a combined energy generation capacity of nearly 2,100MW. The divestiture closes a strategic assessment, which was announced on 13 September 2018.

Canadian Utilities CEO Siegfried Kiefer said: “These assets provide reliable and affordable energy to customers across Canada and I want to thank our employees for their commitment and dedication to operating these assets to the highest standards.

“We are focused on building a globally diversified portfolio of energy-related infrastructure assets. Continually evaluating our business model and strategies ensures we are well-positioned to capture opportunities in markets at home and abroad.”

Subject to customary closing adjustments and receipt of regulatory approvals, the transaction is expected to complete in the second half of this year.

For this transaction, RBC Capital Markets and JP Morgan are serving as joint financial advisors to CU.

Energy Capital Partners managing partner Tyler Reeder said: “We are impressed by the portfolio’s high-quality assets and strong operating history.

“We look forward to partnering with the portfolio’s talented management team and employees and to continuing to provide a high level of service to the portfolio’s offtakers and customers.”

“These assets provide reliable and affordable energy to customers across Canada.”

CU will retain Ashcor Technologies, the Oldman River Hydro Facility, and international projects. CU will hold about 250MW of electricity generation assets in Canada, Mexico and Australia after the sale.

The company has also agreed to sell its 50% ownership stake in the 260MW Cory cogeneration station to SaskPower International. The station is located outside Saskatoon, Saskatchewan.

Financial terms of the transaction have not been disclosed by either company.