Enbridge to Sell 49 Percent of its Interests in Select Renewable Power Assets for $1.75 Billion
CALGARY, Enbridge Inc. (TSX, NYSE: ENB) (Enbridge or the Company) has entered into agreements with the Canada Pension Plan Investment Board (CPPIB) to monetize a 49 percent interest in select North American onshore renewable power assets, as well as 49 percent of Enbridge’s interests in two German offshore wind projects (Hohe See, and related expansion) through a newly created joint venture with CPPIB, for approximately CAD$1.75 billion.
The assets being contributed by Enbridge to the joint venture include all of Enbridge’s Canadian renewable power assets, held through Enbridge Income Fund, as well as two U.S. assets, namely the Cedar Point Wind Farm in Colorado and the Silver State North Solar Project in Nevada. Enbridge expects to retain its interests in certain other U.S. renewable power assets, which may be monetized or sold at a later date.
Under the terms of the agreements, CPPIB will fund its 49 percent pro-rata share of the remaining construction capital required to complete the Hohe See projects (offshore Germany), which are scheduled to come into service at the start of 2020. This additional capital commitment is estimated at approximately CAD$0.5 billion, bringing CPPIB’s total commitment to approximately CAD$2.25 billion.
Enbridge and its affiliates will continue to manage, operate and provide administrative services for the renewable power assets.
“The monetization of $1.75 billion of renewable assets through our newly formed joint venture with CPPIB is an important step in achieving the objective we set when we rolled out our three-year plan and strategic priorities in December,” said Enbridge President and Chief Executive Officer Al Monaco. “This deal makes a significant contribution to our $3 billion asset sales target for the year and will also eliminate $500 million of equity capital requirement that we had previously included in our funding plan. This transaction, in addition to our other funding actions taken since April, accelerates funding for our secured capital program and gives us increased financial flexibility.”
Further, Enbridge and CPPIB have entered into an agreement whereby the two parties will form a 50-50 joint venture for the pursuit of future European offshore wind projects. These projects may be in the early development, late development, construction or operational phase.
“We are also very pleased to be partnering with CPPIB in future development of our European offshore wind business, which we believe will have great opportunities for years to come,” continued Mr. Monaco. “The combination of our operating and development capability with CPPIB’s resources and experience creates a powerful Canadian champion for developing offshore renewable energy projects in Europe.”
Each of the North American and German sale agreements is subject to closing adjustments and conditions customary in transactions of this nature. Closing is expected to occur during the third quarter of 2018 subject to the receipt of all necessary regulatory approvals and consents. Enbridge anticipates a minimal amount of cash taxes arising from the sale of these renewable assets.
CIBC Capital Markets acted as exclusive financial adviser and Dentons acted as exclusive legal adviser to Enbridge.
Forward-Looking Information
Forward-looking information, or forward-looking statements, have been included in this news release to provide information about the Company and its subsidiaries and affiliates, including management’s assessment of Enbridge and its subsidiaries’ future plans and operations. This information may not be appropriate for other purposes. Forward-looking statements are typically identified by words such as ”anticipate”, ”expect”, ”project”, ”estimate”, ”forecast”, ”plan”, ”intend”, ”target”, ”believe”, “likely” and similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information or statements included or incorporated by reference in this document include, but are not limited to, statements with respect to the following: the transactions described in this news release (the “Transaction”); the closing of the Transaction and the timing thereof; taxes arising from the Transaction; financial strength and flexibility; equity capital requirements and funding plans; expected costs and in-service dates related to projects; future asset sales or monetizations; expected future actions of regulators; expectations regarding the impact of the Transaction; and future business prospects and performance, including future European offshore wind projects.
Although Enbridge believes these forward-looking statements are reasonable based on the information available on the date such statements are made and processes used to prepare the information, such statements are not guarantees of future performance and readers are cautioned against placing undue reliance on forward-looking statements. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements. Material assumptions include assumptions about the following: the timing and completion of the Transaction, including receipt of regulatory approvals and the satisfaction of other conditions precedent; the realization of anticipated benefits of the Transaction; anticipated costs and in-service dates related to projects; and financial strength and flexibility.
Enbridge’s forward-looking statements are subject to risks and uncertainties pertaining to the Transaction and the impact thereof, regulatory parameters, economic and competitive conditions, changes in tax laws and tax rates, exchange rates, interest rates, political decisions and supply of and demand for renewable energy, including but not limited to those risks and uncertainties discussed in this news release and in the Company’s other filings with Canadian and United States securities regulators. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these are interdependent and Enbridge’s future course of action depends on management’s assessment of all information available at the relevant time. Except to the extent required by applicable law, Enbridge assumes no obligation to publicly update or revise any forward-looking statements made in this news release or otherwise, whether as a result of new information, future events or otherwise. All subsequent forward-looking statements, whether written or oral, attributable to Enbridge or persons acting on the Company’s behalf, are expressly qualified in their entirety by these cautionary statements.
About Enbridge Inc.
Enbridge Inc. (the Company) is North America’s premier energy infrastructure company with strategic business platforms that include an extensive network of crude oil, liquids and natural gas pipelines, regulated natural gas distribution utilities and renewable power generation. The Company safely delivers an average of 2.8 million barrels of crude oil each day through its Mainline and Express Pipeline; accounts for approximately 65% of U.S.-bound Canadian crude oil exports; and moves approximately 20% of all natural gas consumed in the U.S., serving key supply basins and demand markets. The Company’s regulated utilities serve approximately 3.7 million retail customers in Ontario, Quebec, and New Brunswick. Enbridge also has interests in more than 2,500 MW of net renewable generating capacity in North America and Europe. The Company has ranked on the Global 100 Most Sustainable Corporations index for the past nine years; its common shares trade on the Toronto and New York stock exchanges under the symbol ENB.
