Cube Hydro has 385MW of hydro capacity, from facilities located in New York, Pennsylvania, Virginia, West Virginia and North Carolina in US

26June - OPG

Image: Mahoning Creek Hydroelectric Project Armstrong County Pennsylvania. Photo: Courtesy of CNW Group/Ontario Power Generation Inc.

Ontario Power Generation (OPG) has announced the signing of an agreement with I Squared Capital, to acquire Cube Hydro, through its US hydroelectric platform.

Established in 2014, Cube Hydro operates 19 small and medium-sized hydropower facilities on ten river systems in five states, providing 385MW of in-service capacity.

The transaction value of £886m is subject to customary working capital and other adjustments on closing.

OPG said that it would finance the investment primarily through corporate public debt program and other available credit facilities.

OPG Ken president & CEO Hartwick said: “OPG has significant hydroelectric expertise in Ontario and in the U.S., so acquiring this portfolio of diversified, high-quality, long-life assets represents a natural fit for us.

“This is also an opportunity to grow our revenue base over the long term and provide increased returns to our Shareholder, the Province of Ontario.”

Goldman Sachs serves as financial advisor to OPG for the transaction, while Centerview Partners serves as financial advisor and Sidley Austin, Troutman Sanders, and Davis Polk & Wardwell serves as legal counsel to I Squared Capital.

Cube Hydro acquisition to strengthen OPG’s existing US hydro platform

The acquisition is expected to further strengthen OPG’s existing US hydro platform and generate meaningful operational synergies between the two platforms, enhancing opportunities for further capital deployment.

Following the completion of the transaction, OPG would operate Cube Hydro as part of its US hydroelectric platform.

The transaction is expected to close in the coming months upon the receipt of required regulatory approvals.

I Squared Capital chairman and managing partner Sadek Wahba said: “This is the third portfolio company realization in the last twelve months based on the I Squared Capital platform approach, with a total of over $2.8 billion in realized enterprise value.

“With the sale of Cube Hydro, I Squared Capital is at the forefront of infrastructure platform building and we look to develop further platforms across different sectors and regions.”

I Squared Capital has developed and recently sold 800MW Lincoln Clean Energy to Ørsted, and 34MW Amplus Solar to Petronas.