Hydro One Invests $257 Million in Northern Ontario Transmission Project to Enhance Energy Infrastructure
In an important move for energy infrastructure in Canada, Hydro One Limited has announced that its subsidiary, Hydro One Networks Inc., has reached a pivotal agreement to acquire an approximately 48% stake in the East-West Tie Limited Partnership. This partnership is significant as it involves the ownership of the East-West Tie Line, a crucial 450-kilometre, 230 kV double-circuit transmission line that has been regulated by the Ontario Energy Board (OEB). The line stretches from Wawa to Thunder Bay, running along the picturesque north shore of Lake Superior.
Hydro One will be making this investment in the partnership for a total cash consideration of $257 million. This investment is seen as a strategic move to bolster the reliability of electricity distribution and to foster long-term economic growth in the region. The transaction also creates a collaborative partnership with the remaining stakeholders, which includes the Bamkushwada Limited Partnership—a consortium of six First Nations—and affiliates of NextEra Energy Canada, LP, with ownership shares of 3.5% and 48%, respectively.
David Lebeter, the President and CEO of Hydro One, expressed pride in the company's long-standing history of owning and operating transmission infrastructure in Northern Ontario. He emphasized the dual benefits of this investment, stating, "By investing in this critical transmission infrastructure, we not only support the reliable delivery of electricity but also contribute to the long-term economic opportunities and shared prosperity in the region."
The project is noteworthy not just for its economic implications, but also for its inclusive approach towards Indigenous partnerships and collaboration. Michael Hill, Executive Vice President and Global Head of OMERS Infrastructure, noted the importance of working with First Nations in the development and operationalization of the East-West Tie project. He affirmed Hydro One's capability as a strategic partner, citing its extensive experience managing over 90% of Ontario's transmission network.
Similarly, Enbridge’s Matthew Akman highlighted the collaborative efforts made in the project with a substantial focus on Indigenous inclusion, further indicating that Hydro One's established presence within the Ontario transmission landscape would add valuable expertise to the partnership.
The East-West Tie Line itself has an approved rate base of roughly $880 million and serves as a vital link for communities and industries located in the northwest of Ontario, connecting them directly to the provincial electricity grid. The closing of this transaction is contingent on meeting customary closing conditions, ensuring that all regulatory requirements are satisfied before finalization.
Financial advisors played a crucial role in this transaction. CIBC Capital Markets acted as the exclusive financial advisor for Hydro One while Gowling WLG served as the external legal counsel. For OMERS and Enbridge, TD Securities and Torys LLP provided similar advisory services, reinforcing the collaborative approach taken by all parties involved in this substantial investment.
Hydro One Limited, recognized as Ontario’s largest electricity transmission and distribution provider, boasts approximately 1.5 million valued customers and a substantial asset base of about $32.8 billion as of the end of 2023. The company's annual revenues for the year were estimated at around $7.8 billion, illustrating the critical role it plays in delivering electricity across the province. The company continues to prioritize community investment, sustainability initiatives, and diversity.
With this investment, Hydro One not only strengthens its foothold in the energy sector of Northern Ontario but also paves the way for future opportunities that marry infrastructure developments with community growth, sustainability, and cooperation with Indigenous communities, which has proven to be crucial in the long-term success of energy projects in the region.
Hydro One will be making this investment in the partnership for a total cash consideration of $257 million. This investment is seen as a strategic move to bolster the reliability of electricity distribution and to foster long-term economic growth in the region. The transaction also creates a collaborative partnership with the remaining stakeholders, which includes the Bamkushwada Limited Partnership—a consortium of six First Nations—and affiliates of NextEra Energy Canada, LP, with ownership shares of 3.5% and 48%, respectively.
David Lebeter, the President and CEO of Hydro One, expressed pride in the company's long-standing history of owning and operating transmission infrastructure in Northern Ontario. He emphasized the dual benefits of this investment, stating, "By investing in this critical transmission infrastructure, we not only support the reliable delivery of electricity but also contribute to the long-term economic opportunities and shared prosperity in the region."
The project is noteworthy not just for its economic implications, but also for its inclusive approach towards Indigenous partnerships and collaboration. Michael Hill, Executive Vice President and Global Head of OMERS Infrastructure, noted the importance of working with First Nations in the development and operationalization of the East-West Tie project. He affirmed Hydro One's capability as a strategic partner, citing its extensive experience managing over 90% of Ontario's transmission network.
Similarly, Enbridge’s Matthew Akman highlighted the collaborative efforts made in the project with a substantial focus on Indigenous inclusion, further indicating that Hydro One's established presence within the Ontario transmission landscape would add valuable expertise to the partnership.
The East-West Tie Line itself has an approved rate base of roughly $880 million and serves as a vital link for communities and industries located in the northwest of Ontario, connecting them directly to the provincial electricity grid. The closing of this transaction is contingent on meeting customary closing conditions, ensuring that all regulatory requirements are satisfied before finalization.
Financial advisors played a crucial role in this transaction. CIBC Capital Markets acted as the exclusive financial advisor for Hydro One while Gowling WLG served as the external legal counsel. For OMERS and Enbridge, TD Securities and Torys LLP provided similar advisory services, reinforcing the collaborative approach taken by all parties involved in this substantial investment.
Hydro One Limited, recognized as Ontario’s largest electricity transmission and distribution provider, boasts approximately 1.5 million valued customers and a substantial asset base of about $32.8 billion as of the end of 2023. The company's annual revenues for the year were estimated at around $7.8 billion, illustrating the critical role it plays in delivering electricity across the province. The company continues to prioritize community investment, sustainability initiatives, and diversity.
With this investment, Hydro One not only strengthens its foothold in the energy sector of Northern Ontario but also paves the way for future opportunities that marry infrastructure developments with community growth, sustainability, and cooperation with Indigenous communities, which has proven to be crucial in the long-term success of energy projects in the region.
Topics Energy）
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