Innergex and the Mi'gmaq communities of Quebec sign a 20-year power purchase agreement for a 150 MW wind project

Innergex and the Mi'gmaq communities of Quebec sign a 20-year power purchase 
agreement for a 150 MW wind project 

        --  Marks an important milestone in the progression of this project
        --  First wind farm in Gaspésie to be developed in partnership with
            First Nations communities

LONGUEUIL, QC, March 24, 2014 /CNW Telbec/ - Innergex Renewable Energy Inc. 
(TSX: INE) ("Innergex" or the "Corporation") announces that the Mesgi'g 
Ugju's'n (MU) Wind Farm, L.P. has signed a 20-year power purchase agreement 
with Hydro-Québec Distribution for a 150 MW wind energy project located in 
the Gaspé Peninsula, in Quebec. This entity is controlled 50-50 by Innergex 
and by the three Mi'gmaq communities of Quebec - Gesgapegiag, Gespeg and 
Listuguj. Innergex is responsible for the management of the construction and 
the operation of the wind farm.

"We are honoured and proud to have been chosen by the Mi'gmaq communities of 
Quebec to jointly develop this wind energy project, and the signing of a power 
purchase agreement marks an important milestone in the progression of its 
development", states Michel Letellier, President and Chief Executive Officer 
of Innergex.

"This project is significant to the socio-economic development of the Mi'gmaq 
communities of Gesgapegiag, Gespeg and Listuguj. It will create wealth and 
jobs not only for our members, but also for our neighbours in Gaspésie and 
elsewhere in Quebec. We see great opportunities for the future", declares 
Chief Claude Jeannotte, Chairperson of the Mi'gmawei Mawiomi.

The 150 MW Mesgi'g Ugju's'n wind project is located on public lands in the 
Avignon Regional County Municipality in Quebec. The environmental impact 
assessment for the project has been completed and submitted to the Ministry of 
Sustainable Development, Environment, Wildlife and Parks. Open houses have 
been conducted and an information session was held in February as part of the 
information-gathering portion of the province's environmental review process. 
Negotiations with potential turbine suppliers are underway. The partners 
expect to begin pre-construction activities, such as wood clearing, in late 
2014 once all authorizations have been received, and to begin construction in 
2015. They expect to begin commercial operation of the wind farm at the end of 
2016. The cost of the project is currently estimated at approximately $365.0 
million and will be financed in a proportion of approximately 80% with 
non-recourse, fixed-rate project-level debt. To this end, the partners have 
begun a hedging program to fix the base interest rate through the use of 
derivative financial instruments, until a project financing is closed.

The wind farm is expected to have a long-term average annual production of 
approximately 515,000 MWh, enough to power more than 30,000 Quebec households 
each year. In its first full year of operation, it is expected to generate 
revenues and Adjusted EBITDA of approximately $55.0 million and $45.0 million 
respectively. The 20-year power purchase agreement signed with Hydro-Québec 
Distribution is now in effect and requires no further approvals. This contract 
stipulates a selling price of $0.1012 per kWh in 2014 dollars, with an annual 
adjustment based on 100% of the Consumer Price Index until the end of 2016 and 
on 20% thereafter. This is equivalent to a price of $0.089 per kWh in 2014 
dollars, with an annual adjustment based on 100% of the Consumer Price Index, 
thereby respecting the maximum of $0.09 per kWh established by the Government 
of Quebec.

The partners will share in the distributions from the project in varying 
proportions, based in part on their initial equity investment. Initially, the 
Corporation expects to fund a majority of the equity investment required for 
this project; as a result, it expects to receive approximately 75% of the 
project's cash flows during the first year. However, during the first 15 years 
of operation, the Mi'gmaq communities of Quebec will have the right to 
gradually increase their equity investment in the project up to 65% (by 
purchasing portions of the Corporation's equity at a price based on the 
present value of future cash flows using a predetermined rate of return) and 
therefore receive a higher proportion of cash flows. In any event, starting in 
the 16th year, the Corporation will receive no less than 35% and no more than 
40% of the project's annual cash flows for the remaining life of the project.

About the Mi'gmawei Mawiomi

The Mi'gmawei Mawiomi is an Assembly comprising the three Mi'gmaq communities 
located in Gespe'gewa'gi: Gesgapegiag, Gespeg and Listuguj.  The Assembly 
ensures, among other things, the Mi'gmaq Nation has access to its resources, 
the purpose of which is to support the political and social objectives of the 
Mi'gmaq governments.  The Assembly has established a secretariat, the 
Mi'gmawei Mawiomi Secretariat (MMS), whose focus is creating an independent 
Mi'gmaq government based on a Constitution that promotes and protects the 
rights, freedoms and well-being of the Mi'gmaq.

About Innergex Renewable Energy Inc.

Innergex Renewable Energy Inc. (TSX: INE) is a leading Canadian independent 
renewable power producer. Active since 1990, the Company develops, owns and 
operates run-of-river hydroelectric facilities, wind farms and solar 
photovoltaic farms and carries out its operations in Quebec, Ontario and 
British Columbia and in Idaho, USA. Its portfolio of assets currently consists 
of: (i) interests in 32 operating facilities with an aggregate net installed 
capacity of 672 MW (gross 1,164 MW), including 25 hydroelectric operating 
facilities, six wind farms, and one solar photovoltaic farm; (ii) interests in 
five projects under development or under construction with an aggregate net 
installed capacity of 210 MW (gross 321 MW), for which power purchase 
agreements have been secured; and (iii) prospective projects with an aggregate 
net capacity totaling 2,900 MW (gross 3,125 MW). Innergex Renewable Energy 
Inc. is rated BBB- by S&P and BB (high) by DBRS (unsolicited rating).

The Corporation's strategy for building shareholder value is to develop or 
acquire high-quality facilities that generate sustainable cash flows and 
provide a high return on invested capital, and to distribute a stable dividend.

Non-IFRS Measures

Readers are cautioned that Adjusted EBITDA is not a measure recognized by IFRS 
and has no meaning prescribed by it, and therefore may not be comparable to 
those presented by other issuers. Innergex believes that this indicator is 
important, as it provides management and readers with additional information 
about its cash generation capabilities and facilitates the comparison of 
results over different periods. References to "Adjusted EBITDA" are to 
revenues less operating expenses, general and administrative expenses and 
prospective project expenses. Readers are cautioned that this non-IFRS measure 
should not be construed as an alternative to net earnings as determined in 
accordance with IFRS.

Forward-looking information

In order to inform readers of the Corporation's future prospects, this press 
release contains forward-looking information that can generally be identified 
by the use of words such as "projected", "potential", "expect", "will", 
"should", "estimate", "forecasts", "intends", or other comparable terminology 
that states that certain events will or will not occur. It represents the 
estimates and expectations of the Corporation relating to future results and 
developments as of the date of this press release. It includes future-oriented 
financial information, such as estimated electricity production, revenues, 
Adjusted EBITDA, project costs and financing, to inform readers of the 
potential financial impact of developing the Mesgi'g Ugju's'n wind energy 
project. Such information may not be appropriate for other purposes.

The material risks and uncertainties that may cause actual results and 
developments to be materially different from current expressed Forward-Looking 
Information are referred to in the Corporation's Annual Information Form in 
the "Risk Factors" section and include, without limitation: the ability of the 
Corporation to execute its strategy; its ability to access sufficient capital 
resources; liquidity risks related to derivative financial instruments; 
changes in hydrology, wind regimes and solar irradiation; delays and cost 
overruns in the design and construction of projects; the ability to develop 
new facilities; and variability of installation performance and related 

Forward-Looking Information in this press release is based on certain 
principal assumptions made by the Corporation. The following table outlines 
Forward-Looking Information contained in this press release, the principal 
assumptions used to derive this information and the principal risks and 
uncertainties that could cause actual results to differ materially from this 
             Principal Assumptions       Principal Risks and Uncertainties
    Estimated production, revenues and   Improper assessment of water, wind
    Adjusted EBITDA                      and sun resources and associated
                                         electricity production
    For each facility, the Corporation
    determines an annual long-term       Variability in hydrology, wind
    average level of electricity         regimes and solar irradiation
    production (LTA) over the expected
    life of the facility, based on       Equipment failure or unexpected
    several factors that include,        operations & maintenance activity
    without limitation, historically
    observed water flows or wind or      Unexpected seasonal variability in
    solar irradiation conditions,        the production and delivery of
    turbine or panel technology,         electricity
    installed capacity, energy losses,
    operational features and             Variability of facility
    maintenance. Although production     performance and related penalties
    will fluctuate from year to year,
    over an extended period it should    Changes to water and land rental
    approach the estimated long-term     expenses
    average. The Corporation then
    estimates expected annual            Number of prospective projects in
    revenuesfor each facility by         activity
    multiplying its LTA by a price for
    electricity stipulated in the        Unexpected maintenance
    power purchase agreement secured     expenditures
    with a public utility or other
    creditworthy counterparty. These     Lower inflation rate than expected
    agreements stipulate a base price
    and, in some cases, a price
    adjustment depending on the month,
    day and hour of delivery. In most
    cases, power purchase agreements
    also contain an annual inflation
    adjustment based on a portion of
    the Consumer Price Index. The
    Corporation then estimates annual
    operating earnings by subtracting
    from the estimated revenues the
    budgeted annual operating costs,
    which consist primarily of
    operators' salaries, insurance
    premiums, operations and
    maintenance expenditures, property
    taxes, and royalties; these are
    predictable and relatively fixed,
    varying mainly with inflation
    except for maintenance
    Estimated project costs, expected    Performance of counterparties,
    obtainment of permits, start of      such as the EPC contractors
    construction, work  conducted and
    start of commercial operation for    Delays and cost overruns in the
    development projects or              design and construction of
    prospective projects                 projects
    For each development project, the    Obtainment of permits
    Corporation provides an estimate
    of project costs based on its        Equipment supply
    extensive experience as a
    developer, directly related          Interest rate fluctuations and
    incremental internal costs, site     availability of financing
    acquisition costs and financing
    costs, which are eventually          Relationships with stakeholders
    adjusted for projected costs
    provided by the engineering,         Regulatory and political risks
    procurement and construction (EPC)
    contractor retained for the
    project. The Corporation provides
    indications regarding scheduling
    and construction progress for its
    development projects and
    indications regarding its
    prospective projects, based on its
    extensive experience as a
    Expected project financing           Interest rate fluctuations and
                                         availability of financing
    The Corporation provides
    indications of its intention to      Financial leverage and restrictive
    secure non-recourse project-level    covenants governing current and
    debt financing for its development   future indebtedness
    projects, based on the expected
    LTA production and expected costs
    of each project, the expected
    remaining power purchase agreement
    term, a leverage ratio of
    approximately 75%-85%, as well as
    the Corporation's extensive
    experience in project financing
    and knowledge of the capital

Although the Corporation believes that the expectations and assumptions on 
which Forward-Looking Information is based are reasonable, readers of this 
press release are cautioned not to rely unduly on this Forward-Looking 
Information since no assurance can be given that they will prove to be 
correct. The Corporation does not undertake any obligation to update or revise 
any Forward-Looking Information, whether as a result of events or 
circumstances occurring after the date of this press release, unless so 
required by legislation.

SOURCE  Innergex Renewable Energy Inc. 
Marie-Josée Privyk, CFA, SIPC Director - Investor Relations 450928-2550, 
ext. 222 
To view this news release in HTML formatting, please use the following URL: 
CO: Innergex Renewable Energy Inc.
ST: Quebec
-0- Mar/24/2014 12:00 GMT
Press spacebar to pause and continue. Press esc to stop.