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  penalties.  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  information.              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     expenditures.     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     developer.     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     markets.  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 NI: UTI ORDER