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Abstract
Northland Power Income Fund ("Northland Power" or the "Fund'") (TSX:NPI.UN) announced today that it has entered into an agreement, subject to certain conditions, to indirectly acquire the remaining 50% of the 110 MW Kingston cogeneration facility ("Kingston") that it did not previously own from a subsidiary of The AES Corporation, bringing the Fund's ownership to 100%. In conjunction with this acquisition, the Manager of the Fund will assume overall management of operations and maintenance for Kingston. Furthermore, as part of the acquisition, Northland Power will retire the debt owed to the Ontario Electricity Financial Corporation ("OEFC"), pursuant to the levelization mechanism in the Kingston Power Purchase Agreement.
Northland Power Income Fund indirectly owns interests in four power projects: three natural gas-fired combined-cycle cogeneration power plants that efficiently and cleanly produce electricity and steam for sale and one wind power project. Two cogeneration plants are located in Ontario: the 120 megawatt (MW) Iroquois Falls facility, which has been wholly-owned by the Fund since its inception in 1997, and the 110 MW Kingston facility, of which the Fund will own 100% after closing of the transaction. Through its 19% equity interest in Panda Energy Corp. (PEC) and loan to a PEC subsidiary, the Fund has an interest in the 230 MW Panda-Brandywine cogeneration plant located just outside Washington, D.C. Electricity produced from the cogeneration plants is sold under long-term power purchase agreements (PPAs) with creditworthy entities to ensure revenue stability, and long-term contracts assure the supply and price of natural gas, which is the Fund's largest cost. The 54 MW Mont Miller wind power project in the Gaspesie region of Quebec supplies electricity to Hydro-Quebec under the terms of a 21-year PPA.