Brookfield Renewable to buy 351-MW US hydropower project from Alcoa

Jun 29, 2012 - Canadian Brookfield Renewable Energy Partners LP (TSE:BEP.UN) is to acquire the 351-MW Tapoco hydropower project in the US from US aluminium producer Alcoa (NYSE:AA) in a USD-600-million (EUR 473m) deal, the companies said Friday.

The Tapoco project includes four stations on the Little Tennessee and Cheoah rivers in Tennessee and North Carolina. It was developed by Alcoa to power its aluminum smelting and rolling mill business in Alcoa, Tennessee. The four dams were put into operation between 1919 and 1957.

Brookfield Renewable said it would own a stake of some 25%, while the remaining interest would be funded by an institutional fund ran by Brookfield Asset Management (TSE:BAM.A). It also said that the project was in the latter stages of an upgrade programme, which was set to boost its capacity to 378 MW.

Brookfield Renewable chief executive Richard Legault said the Tapoco facilities were situated in the firm's core markets, adding that the southern US had an attractive supply-demand dynamics. "We believe this acquisition provides a unique opportunity to capture rising electricity prices," Legault said. The facilities have a power purchase agreement with the Tennessee Valley Authority for through June 2014.

Brookfield Renewable said it expected to fund the acquisition with non-recourse debt, as well as available cash and credit resources. Subject to regulatory approvals and customary closing conditions, the deal is expected to be completed by the end of 2012.

(USD 1.0 = EUR 0.789)

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