Patrick Lemaire, president & CEO of Boralex Inc., poses in their head offices in Montreal on May 10, 2012.
Montreal-based renewable energy producer Boralex Inc. has sharply boosted its presence in France with a $400-million proposed takeover of wind power company Enel Green Power France.
The acquisition of the Enel wind portfolio will boost the generating capacity of Boralex's existing operations by about 25 per cent, with the addition of 12 operating wind farms generating about 186 megawatts of power.
Currently, Boralex has wind farms, solar projects, hydroelectric and thermal operations in France, Canada and the United States, that have a total capacity of about 754 MW.
The company said this deal will make it the biggest independent wind power producer in France.
Adding a large proportion to the French porfolio is a "truly company-transforming move," said Boralex chief executive officer Patrick Lemaire.
Currently, France makes up about 37 per cent of the Boralex portfolio, but that will expand to almost half after this transaction closes in January.
Mr. Lemaire said in an interview that growth in the renewable sector is "clearer" in Europe than in North America, at the moment. Changes in Ontario's renewable energy procurement program that make it less attractive, and limits to Quebec's plans to acquire clean energy, have made those two core Canadian markets less attractive, he said.
"France still has nice objectives," he said.
Boralex is also less interested in expanding in the United States, Mr. Lemaire said, because most jurisdictions there operate with a spot market for electricity, and thus there are fewer long-term contracts that secure a power price over the long term. The wind farms being purchased in this deal have long-term contracts in place averaging about 11 years.
Privately owned Enel also has a pipeline of about 310 MW of new wind projects that are not yet built, and that will add further to the Boralex total in the next few years, Mr. Lemaire said. "Our main goals are to operate what we have acquired in the past, build new projects … and add growth for the next few years."
Boralex will finance the Enel purchase through bank loans, an existing revolving credit facility, and a bridge credit facility. It will also sell about $110-million in subscription receipts through a bought-deal transaction arranged by National Bank Financial.