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Innergex signs Chilean renewable energy supply contract

Will provide Codelco 350 GWh per year for 15 years

Innergex Renewable Energy Inc.Quebec-based Innergex Renewable Energy Inc. (INE-T) is expanding its global renewable energy portfolio after concluding a long-term deal to supply clean energy to Codelco, Chile's state-owned copper mining company.

Under the terms of the 15-year power purchase agreement (PPA) announced on March 1, Innergex will provide 350 gigawatt-hours per year to Codelco, consolidating its position as the leading supplier of renewable energy in Chile.

Moreover, Innergex will continue to play a vital role in accelerating Chile's phased shutdown of the country's coal-fired power plants while transitioning its mining industry toward renewable energy sources. 

The Codelco deal will provide Innergex with stable revenues and cash flow from 2026-2040 in exchange for delivering power generated by a diverse portfolio of assets and projects currently under development.

The supply agreement is also to contribute significantly to the "greening" of Chile's vast mining operations.

"Securing a large-scale power purchase agreement like this one underscores Innergex's reputation as a leading provider of sustainable energy solutions in Chile," Michel Letellier, president and chief executive officer of Innergex, said in a release.

Innergex key player in helping Codelco's energy transition

Innergex will now play a key role in helping Chile's copper mining colossus achieve its stated goal of sourcing 85 per cent of its power requirements from renewable energy as part of the company's increasing adoption of sustainable mining practices. 

This is in keeping with the Chilean government's pledge to close two-thirds of its coal-fired power plants by 2025, transition to 70 per cent renewable energy consumption by 2030, and achieve carbon neutrality by 2050. 

By delivering clean power to Codelco, Innergex is continuing its stated mission to harness renewable energy as "a way to a better world," part of an agenda that saw the company recognized as Canada's best corporate citizen in 2023 by Corporate Knights.

Innergex, founded in 1990 in response to a Quebec government initiative to encourage private sector development of small-scale hydro power, has built up a panoply of renewable energy assets across Canada, the U.S., Chile and France.

A global diversified renewable energy portfolio

This portfolio consists of 87 operating facilities with an aggregate net installed capacity of 3,600 megawatts (gross 4,234 megawatts) and an energy storage capacity of 409 megawatt-hours, including:

  • 41 hydroelectric facilities;
  • 35 wind facilities;
  • nine solar facilities; and
  • two battery energy storage facilities.

These projects include its recent signing of a long-term PPA with Hydro-Québec for a 102 MW wind project, and its selection by Hydro-Québec to provide 400 MW of wind capacity to the electrical grid.

In addition, Innergex has begun supplying power from its 7.5 MW Innavik hydro project in northern Quebec, acquired a 60 MW solar facility in Ontario, and is currently building a 330 MW wind project in Boswell Springs, Wyo.

The announcement of the Codelco green energy supply deal will enable Innergex to build on its existing 705 MW of installed hydro, wind and solar capacity, including 50 MW of complementary battery storage. 

Upbeat Q4 earnings report bolsters Innergex

News of the Chile deal comes on the heels of the release of Innergex's fourth quarter and full year 2023 earnings report that saw Letellier deliver an upbeat assessment of his company's future growth prospects.

Innergex reported a 30 per cent year-over-year increase in adjusted EBITDA proportionate for Q4 2023, a 12 per cent adjusted full year EBITDA proportionate rise to $735.3 million, and offered a positive outlook for 2024.

"We are very pleased to deliver better results for the fourth quarter and fiscal year 2023, while also progressing on our strategic growth initiatives . . ." Letellier said in a Feb. 21 release. 

Last year, France's Crédit Agricole Assurances invested $188.4 million into Innergex France in exchange for a 30 per cent stake in Innergex's French operations. These include 17 operating assets totalling 324 MW of wind energy and 9 MW/9 MWh of storage capacity, as well as a large portfolio of projects at various stages of development.

Innergex committed to green energy transition

Innergex expects to increase its global renewable energy output in the coming years in response to the ever-growing demand for reliable clean energy that will test the capacity of Innergex and other leading sector players to accelerate the transition to fully green energy grids.

In comments made at Innergex's full-year earnings call on Feb. 22, Letellier made it clear his company is prepared to take advantage of this critical juncture in the path toward decarbonization. 

"We are positioning ourselves to seize the unprecedented growth opportunity in our industry . . . The strong market growth we are experiencing in our core market is creating a window of opportunity to capture new capacity driven by both government and corporate decarbonization goals," Letellier said.

"We see a substantial runaway for significant and durable growth ahead. We are excited about the future of Innergex as we have multiple ways we can win in our market."

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