Investment firm KKR is acquiring Emera’s indirect minority equity interest in the Labrador Island Link (LIL) transmission project in a C$1.19bn (€803.9m) deal.
The LIL project – officially commissioned in 2023 – is a 1,100km-high voltage transmission line that delivers renewable energy to Newfoundland, Nova Scotia and beyond.
Emera, an energy and services company, has been an equity investor in the construction of the LIL alongside Newfoundland and Labrador Hydro (NL Hydro), which owns and operates the LIL.
KKR has agreed to pay up to C$957m in cash and C$235m for assuming Emera’s obligation to fund the remaining initial capital investment.
With the investment, KKR will receive quarterly distribution payments over the remaining life of the 50-year LIL contract.
Brandon Freiman, partner at KKR and head of North American infrastructure, said: “KKR has a long history of investing in stable, reliable and essential transmission assets like the Labrador Island Link, and we look forward to beginning this long-term strategic partnership with Emera and NL Hydro to deliver clean energy across the region.”
Emera said the stake sale will enable it to reduce corporate debt and fund its investments in its regulated utility businesses.
Emera will remain actively engaged in the LIL partnership, along with NL Hydro, by continuing to provide sustaining capital investments to support ongoing operations, it said, adding that the transaction has no impact on Emera’s ownership of the Maritime Link transmission line and no impact on Nova Scotia Power, or its customers.
Scott Balfour, CEO of Emera, said: “This agreement is an important step in strengthening our company and positioning us to continue to capitalise on the growth opportunities in front of us. With this transaction, we look forward to a new relationship with KKR while remaining committed to our partnership with NL Hydro.”
Jennifer Williams, CEO of Newfoundland and Labrador Hydro, said: “The LIL is a strategic asset for Newfoundland and Labrador as it continues down the path of building its clean-energy future.
“This new arrangement is evidence of the quality of the LIL and the critical role that it plays to harness clean, renewable energy and deliver it to our customers here in Newfoundland and Labrador across the region and beyond.”
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