Plutonic Power and GE Energy Financial Services intend to jointly bid the Upper Toba Valley and Bute Inlet Projects into the 2008 BC Hydro Clean Power Call Request for Proposals in November.
Based on current assumptions, if the two entitiesÂ’ joint bid is accepted, GE Energy Financial Services intends to make an equity contribution of $70 million for a 50% interest in the Upper Toba Valley Project and either by itself, or with other partners, an equity contribution of $650 million for a 60% interest in the Bute Inlet Project.
The final economic terms will be determined based on project variables including final capital cost, awarded energy price and estimates of power output. GE Energy Financial Services would also have the right to arrange debt financing for the projects. Prior to GE Energy Financial ServicesÂ’ equity contribution, Plutonic Power would be responsible for all costs of permitting, public consultation and environmental assessment certification.
Plutonic may elect to repurchase a further 10% interest in the Bute Project by making a $100 million equity contribution to capital costs.
Completion of the transactions is subject to such conditions as completion of satisfactory due diligence; finalization of satisfactory documentation; approval of investment committees and boards of directors; successful bids into BC HydroÂ’s Clean Power Call Request for Proposals; senior debt financing for the projects; and regulatory approvals.
Upon successfully acquiring an energy purchase agreement for Upper Toba Valley Project and Bute Inlet Project with BC Hydro, GE Energy Financial Services would be granted one million and four million warrants respectively, to purchase common shares in Plutonic Power Corporation. The warrants would be exercisable at a price equal to the market price for PlutonicÂ’s common shares at the time they are issued, have a term of five years and, be subject to vesting provisions.
“With the support of GE Energy Financial Services as our partner, we are confident in submitting a very strong bid into the BC Hydro Clean Power Call Request for Proposals in November,” said Plutonic Vice-Chairman and CEO, Donald McInnes. “These projects have the potential to generate enough clean energy to meet the needs of over 300,000 homes and will position Plutonic and GE Energy Financial Services as leaders in the development of clean energy and reduction in reliance on fossil fuel-generated electricity by annually offsetting over 2.2 million tonnes of CO2 emissions.”
“This bid strengthens the existing relationship between Plutonic and GE Energy Financial Services and, if successful, would significantly expand GE’s renewable energy base in the province of British Columbia,” said Mark Tonner, Managing Director for Canada at GE Energy Financial Services.
The Upper Toba Valley Project - a series of three sites with a capacity of approximately 120MW - and the Bute Inlet Project - 18 sites with an approximate capacity of 900 MW - are in the permitting and review stages of the Environmental Assessment Process.
The Bute project is located north of the Toba Valley, where Plutonic and GE Energy Financial Services are already partnering on the $660 million, 196 MW East Toba River/Montrose Creek run-of-river hydroelectric power project. That project has been under construction since July 2007.