Fortis has agreed to sell its 51% stake in the 335MW Waneta Expansion Hydroelectric Project in Canada to Columbia Power Corporation (CPC) and Columbia Basin Trust (CBT) for about C$1bn ($754.4m).
The deal will see the exit of Fortis from the Waneta Expansion hydro project, while CPC and CBT, which are both owned by the British Columbia government, take 100% ownership. Currently, Columbia Power and Columbia Basin Trust hold stakes of 32.5% and 16.5%, respectively, in the project.
Constructed near Trail in British Columbia on the Pend d’Oreille River, the hydro power station has been in operations since mid 2015.
Fortis said that the transaction is in line with its capital investment funding strategy. The Canadian electric utility expects the cash proceeds from the deal to partly fund its C$17.3bn ($13.05bn) five-year capital investment plan at its North American regulated utility business.
Fortis president and CEO Barry Perry said: “The sale of our interest in the Waneta Expansion helps finance the substantial growth occurring in our regulated utility business, including growth in British Columbia.
“This transaction completes the asset sale funding component of our five-year capital investment plan.”
Comprising two Francis turbines, the Waneta Expansion project was built between 2010 and 2015 with an investment of C$900m ($679m). It is the second hydro power project at the Waneta Dam with the first one comprising four units with a combined capacity of 490MW.
The 335MW expansion project saw addition of a second powerhouse immediately downstream of the Waneta Dam. The Waneta Expansion project shares the previously built hydraulic head and produces enough hydroelectricity to meet the power consumption needs of 60,000 homes.
Columbia Power said that the deal will not impact the hydro power project’s operations or any key agreements. Long-term agreements pertaining to the power plant remain intact with BC Hydro to buy the energy while FortisBC, a subsidiary of Fortis will continue to operate the Waneta Expansion facility and buy its surplus capacity.
Columbia Power acting president and CEO and Columbia Basin Trust president and CEO Johnny Strilaeff said: “We are extremely pleased to be restoring ownership to the originally mandated 50/50 partnership.
“Columbia Basin residents value the local ownership of all of our facilities and will enjoy even greater benefits now, and in the future, as more of the revenues are injected back into this region and to the Province.”
The transaction is expected to be closed in April 2019, subject to meeting of customary closing conditions such as receipt of routine approvals.