OPG raises $500M to finance Eagle Creek acquisition

Ontario Power Generation (OPG) has closed a second $500m green bond issuance with net proceeds mainly used to finance the recent acquisition of Eagle Creek Renewable Energy.

The company said its green bond framework facilitates broad use of proceeds to finance and refinance eligible projects which offer environmental benefits, including Eagle Creek, which operates one of the largest hydroelectric fleets in the U.S.

OPG chief financial officer Ken Hartwick said: “OPG is proud to use green bonds to finance clean power initiatives. OPG believes low cost, reliable, clean power is fundamental to a healthy environment and a strong low-carbon economy.”

OPG’s acquisition of Eagle Creek is expected to reinforce the company’s commitment to focus on clean, reliable and low-cost sources of energy.

In June 2018, OPG had entered into a purchase and sale agreement with Eagle Creek to acquire 100% stakes in the company. The transaction was completed at the end of November 2018.

Eagle Creek was founded in 2010 and operates 63 small hydropower facilities across 13 US states with a combined capacity of 216MW. The hydropower assets are mainly located in the New England, New York and Midwest power markets.

Built across 45 waterways, Eagle Creek’s hydropower plants sell electricity within six power pools. Overall, the facilities generate around 920 million kilowatt-hours (kwh) of electricity per year, which is enough to power around 110,000 homes.

The US firm is also constructing a new unit at its 11.75MW Swinging Bridge hydro project on the Mongaup River that is expected to generate 1,100kW and five million kwh of power beginning in 2019.

Earlier, OPG said that the investment in Eagle Creek will not have an impact on electricity bills in Ontario.

OPG claims that it generates safe, clean, reliable, low-cost power for Ontario and over 99% of this power is free of smog and greenhouse gas emissions. Its power is priced an average of 40% lower than other generators, which helps moderate customer bills.

In June last year, OPG issued its first green bond to fund several green energy projects such as the refurbishment of Ranney Falls Generating Station.