Axium Infrastructure Acquires Capital Power’s Renewable Power Asset for $340M
In a significant move within Canada’s renewable energy sector, Axium Infrastructure has acquired a 49% stake in two major wind power facilities from Capital Power Corporation for approximately $340 million. This transaction, finalized by December 20, 2024, marks one of the largest renewable energy deals in Canada for the year.
The Assets Involved
The deal includes a combined 246 megawatt (MW) portfolio, comprising the Quality Wind facility in British Columbia and the Port Dover and Nanticoke Wind facility in Ontario. Both facilities are fully operational, contributing notably to Canada’s renewable energy landscape.
Transaction Structure and Value
Axium paid $340 million in cash, including working capital adjustments. Capital Power retains a 51% majority stake and will continue managing the facilities under a long-term agreement, earning ongoing management fees.
Strategic Benefits
For Capital Power, this sale aligns with their strategy to unlock asset value while maintaining control. It enhances financial flexibility and supports future growth initiatives. Axium gains high-quality, revenue-generating assets and a strategic partnership in the renewable sector.
Contractual and Financial Details
Both wind farms are fully contracted under long-term agreements with investment-grade counterparties, ensuring stable revenue streams. The contracts have a remaining weighted average life of approximately 11 years, providing predictability and security for the partnership.
Strategic Rationale and Impact
For Capital Power, this transaction is part of a broader strategy to optimize asset value by divesting a minority stake while retaining operational control. The sale generates a levered equity return that exceeds internal thresholds, enhancing Capital Power’s financial flexibility and enabling further strategic growth initiatives.
Axium Infrastructure benefits by expanding its renewable energy portfolio with high-quality, operational assets and forming a strategic partnership with an experienced operator in the renewable energy sector.
Advisors on the Transaction
CIBC Capital Markets acted as the financial advisor to Capital Power, while Dentons Canada LLP provided legal counsel for the transaction.
Significance in the Sector
This deal stands out as one of the largest renewable energy transactions in Canada for 2024, underscoring strong investor interest in operational, contracted wind assets. It also reflects confidence in the long-term viability and growth potential of Canada’s renewable energy sector.
Conclusion
The strategic partnership between Capital Power and Axium Infrastructure represents a significant milestone in Canada’s renewable energy sector. By leveraging long-term contracts and investment-grade counterparties, both entities ensure stable revenue streams and financial predictability. This transaction not only highlights the growing investor confidence in operational renewable assets but also underscores the importance of strategic collaborations in driving the sector’s growth. As one of the largest renewable energy deals in Canada for 2024, this partnership sets a benchmark for future investments and reinforces the viability of wind energy as a critical component of the nation’s energy transition.
Frequently Asked Questions
What companies are involved in this renewable energy transaction?
Capital Power and Axium Infrastructure are the primary companies involved in this transaction.
Where are the wind farms located?
The specific locations of the wind farms were not disclosed in the provided details.
How long are the contracts for the wind farms?
The contracts have a remaining weighted average life of approximately 11 years.
Who acted as financial advisor to Capital Power?
CIBC Capital Markets acted as the financial advisor to Capital Power.
Why is this deal significant in the renewable energy sector?
This deal is one of the largest renewable energy transactions in Canada for 2024, reflecting strong investor interest in operational, contracted wind assets and confidence in the sector’s long-term growth.
