Canada Life Insurance Company, Great West Life Insurance Company and London Life Insurance Company have agreed to fund a total of $74.3 million for a hydroelectric project in Ontario, it has been announced.
The companies will provide long-term financing for Boralex’s hydroelectric power station, located on the Mattagami River in Yellow Falls near the town of Smooth Rock Falls in Ontario.
The cash injection represents approximately 81% of estimated project costs, Boralex said in a release.
The financing consists of a short-term tranche of $9.1 million which is fully-amortized over 10 years and a long-term tranche of $65.2 million, which will begin amortizing over 29 years after the repayment of the shorter tranche.
The long-term tranche also includes a bullet repayment feature at the end of the 39 year term. As a whole, the two tranches will bear a fixed average interest rate of approximately 5% over the life of the loans.
Construction of the site for the Yellow Falls project is currently underway, with commissioning planned for the end of the second quarter of 2017. The plant will operate under a 39-year power purchase agreement with IESO.
The hydropower project is Boralex’s first that is developed alongside First Nation partners the Taykwa Tagamou Nation and the Mattagami First Nation.
The two First Nations, together with one of the original developers of the project, have contractual rights to acquire a participation of up to 31.25% of the project.
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