An Axium Infrastructure fund will pay approximately $340 million to acquire a 49 per cent stake in two large Canadian wind power generation facilities from Capital Power Corp. (CPX-T), the firms announced Wednesday morning.

The 246-megawatt portfolio includes the Quality Wind facility in British Columbia and the Port Dover and Nanticoke Wind facility in Ontario, which are both fully operational. Upon closure of the transaction, it will represent one of the largest renewable energy facility transactions in the country during 2024.

“We are proud to announce this asset sell-down transaction which represents a concrete instance of us unlocking asset value in alignment with our strategy,” Jason Comandante, Power Capital’s senior vice-president and head of Canada, said in the announcement. “Our partnership with Axium, a well-respected investor, speaks to the market’s recognition of Capital Power as a top-tier operator and developer.”

Edmonton-based Capital Power reports the two wind facilities are fully contracted with investment-grade firms and have a remaining weighted average contract life of approximately 11 years.

Capital Power to operate the facilities

The Quality Wind facility in northeastern B.C. has an installed capacity of 142 megawatts. It was completed in 2013. The Port Dover and Nanticoke wind facility in southern Ontario was completed in 2012 and has an installed capacity of 104 megawatts.

As per the partnership terms, Capital Power will continue to manage and operate the assets under a long-term asset management agreement. 

Capital Power says the transaction represents a return which exceeds its capital allocation thresholds, and enhances the company’s financial flexibility.

“We are very pleased to establish a partnership with Capital Power,” Axium’s vice-president and senior investment director Elio Gatto said in the announcement. “This transaction is consistent with Axium’s strategy of acquiring meaningful equity positions in high-quality renewable energy projects alongside top-tier partners.”

The transaction is expected to close by year-end 2024, subject to customary closing conditions.

CIBC Capital Markets acted as financial advisor to Capital Power and Dentons Canada LLP acted as legal advisor to Capital Power.

Capital Power’s SMR venture

Earlier this year, Capital Power made headlines for its involvement in a venture with Ontario Power Generation to explore the future development of small modular nuclear reactors to augment Alberta's electricity grid.

The proposal for grid-scale small modular reactors, commonly known as SMRs, was kicked off with a two-year feasibility study involved the province of Alberta and the two energy companies.

The SMRs would help decarbonize Alberta’s electricity grid, which has developed significant wind and solar capacity in recent years but remains heavily dependent on fossil fuels. 

While SMRs are still in their infancy in commercial applications, they are considered much quicker and cheaper to develop than traditional nuclear reactors. OPG is currently building the first SMRs for commercial applications at its Darlington nuclear facility in Ontario.

The first unit at Darlington is expected to be generating power by 2028 or 2029.

About Capital Power, Axium Infrastructure

Capital Power is a producer with approximately 9,300 megawatts of power generation at 32 facilities across North America.

Axium Infrastructure (and its affiliated entities) is an independent portfolio management firm investing in core infrastructure assets. It had over $11.5 billion in assets under management as of Sept. 30, as well as approximately $2 billion in co-investments. 

Axium operates from offices in Montreal, Toronto, Vancouver, New York and London acquiring, developing, financing, operating and managing infrastructure assets. 

Since 2010, the firm has invested in a diversified portfolio of over 265 infrastructure assets.