UPDATED: Pension fund Caisse de dépôt et placement du Québec (CDPQ) has an agreement to acquire Longueuil, Que.-based renewable energy producer and developer Innergex Renewable Energy Inc. (INE-T) in a deal valuing Innergex at $10 billion, including debt.

The transaction will see CDPQ acquire all issued and outstanding common shares of Innergex for $13.75 per share, a 58 per cent premium over its share price that closed at $8.71 on Feb. 24.

Following the announcement, Innergex shares jumped over 50 per cent on the Toronto Stock Exchange, trading at approximately $13.40 as of 10:30 a.m.

Hydro-Quebec, the provincial utility that is Innergex’s largest shareholder at approximately 20 per cent, has agreed to support the deal, along with every member of Innergex’s board of directors.

The acquisition is expected to close by Q4 of this year.

"We are proud to support Innergex as it embarks on this new chapter, guided by a long-term vision, access to capital, and readiness to seize growth opportunities,” Emmanuel Jaclot, executive vice-president and head of infrastructure at CDPQ, said in the announcement.

Quebec City-based CDPQ will look to syndicate up to 20 per cent of its invested capital to bring in investors who want to fund Innergex’s growth.

Innergex’s portfolio

Innergex manages a portfolio of 90 operating hydroelectric, wind and solar generating assets and energy storage facilities in Canada, the U.S., France and Chile. Its gross capacity is 4,663 megawatts (MW).

The company has 1,337 MW of projects in development, according to its Q4 and financial year 2024 results, and a prospective project portfolio of 10.3 gigawatts, made up of primarily wind at 71 per cent.

It has six wind, solar, hydroelectric and energy storage projects under construction, totalling 148.2 MW of generation capacity and 92 MW of storage capacity. Half of the projects are in Chile, with one each in Canada, the U.S. and France.

CDPQ’s relationship with Innergex

CDPQ’s interest in Innergex dates back to 1995, when it made its first investments. It later became Innergex’s second-largest shareholder.

The pension fund says this long history has given it an understanding of Innergex’s “strong development capabilities”, and it believes the renewable energy company will benefit from the access to additional capital to open its full potential. 

Innergex president and CEO Michel Letellier and chief financial officer Jean Trudel will remain in their roles to support the growth strategy.

"As we transition from being a publicly traded company to a privately held entity, this change marks an exciting new chapter in our journey," Letellier said.

"This is great news for everyone involved, as it provides the stability and flexibility to pursue our goals without the distractions of market volatility.”

CDPQ’s climate focus

CDPQ, one of Canada’s largest pension funds, had $434.2 billion in net assets as of Dec. 31, 2023, according to its sustainable investing report.

Environmental stewardship is one of its priorities, with a target for having a net-zero portfolio by 2050.

It held $53 billion in low-carbon assets as at Dec. 31, 2023, with renewable energy making up $22 billion. Approximately 28 per cent of the assets by value are in Quebec, including wind farms, an electric vehicle charging network and sustainable buildings.

One of its goals is to hold $54 billion in low-carbon assets by 2025. The Innergex acquisition will be another step toward that goal.

CDPQ reports it has cut the carbon intensity of its portfolio by 59 per cent since its 2017 baseline, and did not hold any oil and coal production assets as of the end of 2023. With Fonds de solidarité FTQ, CDPQ invested $575 million into Quebec’s gas distribution utility Énergir to develop renewable energy projects and renewable gas production facilities.

EDITOR’S NOTE: Sustainable Biz Canada has updated this article with additional information about CDPQ’s sustainable investing portfolio and targets.