Newsprint producer Abitibi-Consolidated has agreed to create a joint venture with the Caisse de depot et placement du Qu├ębec for the company's hydroelectric generation facilities in Ontario, Canada.

The Company will retain a 75% interest in the venture, called ACH Limited Partnership, while the Caisse will acquire a 25% interest. The Caisse has also provided a commitment to ACH Limited Partnership for a 10-year unsecured term loan of $250M, non-recourse to the Company, to partially fund the acquisition of the facilities.

The transaction, on a consolidated basis, is expected to yield gross proceeds of $297.5M to Abitibi-Consolidated. The deal is expected to close in the first half of 2007 and is subject to execution of definitive agreements and certain other conditions and approvals. Scotia Capital and CIBC World Markets have advised the Company in regards to this transaction.

ACH Limited Partnership encompasses eight hydroelectric facilities located in Ontario, representing an aggregate installed capacity of 136.8MW and a normalised annual generation of approximately 828 GWh.