Plutonic Power Corporation announced today that it has granted a Canadian affiliate of GE Energy Financial Services the exclusive right to provide C$100M (US$90.4M) of project equity as well as lead a C$400M (US$361.5M) debt financing for construction of Canada's East Toba/Montrose Creek run of river hydroelectric project.
In return for the equity investment, Plutonic will provide GE with a 49% equity and 60% economic interest in the East Toba/Montrose project. Following a 35-year term, the economic interests of GE will convert to 49%. GE will also have the right to match any equity investment offer that Plutonic receives for a second hydroelectric project, Rainy River.
The 196MW East Toba River and Montrose Creek Project is located at the headwaters of the Toba Inlet north of Powell River in British Columbia 190km northwest of Vancouver, and is expected to produce enough electricity to meet the annual energy needs of over 75,000 homes. The 15MW Rainy River project is located in Howe Sound, 10km north of Vancouver, and could produce enough electricity for over 5000 homes.
Another GE Energy Financial Services affiliate has provided Plutonic with US$2.5M of credit support for the East Toba River/Montrose Creek project. In consideration of the credit support, Plutonic has issued to the Canadian affiliate of GE Energy Financial Services 375,000 two-year common share purchase warrants with an exercise price of $2.50 per share (the “Warrants”).
The credit support was issued to BC Hydro as part of performance security aggregating $12.66M, required to back 35-year Energy Purchase Agreements for the East Toba/Montrose Creek and Rainy River projects. To supplement the credit support and its own treasury, Plutonic has issued debt instruments totalling $9.70M with a private group of investors (the “Investors”). The Investors will be issued 150,000 Warrants per million dollars received. GE and the Investors will be paid an annual interest rate of 10% for the first 60-day period and 12% thereafter.
The East Toba River/Montrose Creek and Rainy River projects require an estimated $550M in capital (including interest) and will create more than 300 full-time construction jobs over three years. This represents the largest single private sector renewable energy investment in the history of British Columbia, generating enough green electricity to meet the needs of more than 80,000 homes, along with $60M – $70M annually in revenue.