PSP Investments to acquire 1.4GW hydroelectric assets in New England

Sometimes hydro is forgotten as a clean fuel.  Yet, it is one of the oldest forms and is very common in different parts of the world.  Here we see a pension fund buying existing sites.  Anytime we see investment in clean energy we think it speaks well of the value of the underlining asset and strength of  its predictable cash flow.

New England may end up buying much of Canada's surplus hydro-electricity.  That makes for good neighbors and regional efficiency in energy.  We'd much rather see renewables like hydro get imported in versus fossil-fuel sources.




The Public Sector Pension Investment Board ("PSP Investments"), one of Canada's largest pension investment managers, announced today that it has entered into a definitive agreement to acquire from ENGIE Group (EPA: ENGI) a New England portfolio of hydroelectric assets totaling 1.4GW for an enterprise value of US$1.2 billion. PSP Investments intends to maximize the potential benefits of combining its ownership in these premier assets with the operational expertise of its existing hydroelectric power platform, H2O Power LP ("H2O Power").

"PSP Investments is extremely pleased with the acquisition of these significant hydroelectric facilities which form an important component of the Eastern U.S. energy market," said Guthrie Stewart, Senior Vice President, Global Head of Private Investments at PSP Investments. "The purchased assets are an excellent fit with PSP Investments' long-term investment horizon and its strategy to leverage industry-specialized platforms, such as H2O Power," Mr. Stewart added.

The assets to be acquired are core operational merchant hydroelectric facilities located primarily on the Connecticut River in Massachusetts and the Housatonic River in Connecticut. They constitute the 2nd largest privately-owned hydroelectric portfolio within the well-developed and functional ISO New-England (ISO-NE) power market. They include the 1,168MW Northfield Mountain pumped-storage facility as well as 12 conventional hydroelectric facilities, the three largest of which represent an aggregate generation capacity of 134MW. The portfolio generates Renewable Energy Credits.

Majority-owned by PSP Investments, H2O Power currently owns and operates 10 hydroelectric generating stations located in Canada and the United States, representing 170MW of power generation capacity.

The closing of the transaction is subject to customary closing conditions, including regulatory approvals.
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