AltaGas Ltd. (TSX:ALA) is selling three large run-of-river projects it developed in B.C., including the Forrest Kerr project, to Axium Infrastructure Canada II LP and Manulife Financial Corp.
The sale coincides with the recent spinoff of a new Canadian subsidiary of AltaGas – AltaGas Canada Inc. (TSX:ACI), which was created through an initial public offering at the end of November.
The spinoff is part of AltaGas’s shift to the U.S. The Calgary headquartered company acquired WGL Holdings in Washington for US$4.6 billion in July 2018.
The new Canadian subsidiary will continue to own 10% of the three run-of-river power projects, with Manulife and Axium owning 90%.
The Tahlatan First Nation will also continue to own a minority share in one of the projects – Volcano Creek.
As a minority stakeholder with a benefits agreement with AltaGas and a revenue sharing agreement with the provincial government, the Tahltan needed to sign off on the sale of the three projects.
The Tahltan issued a press release Thursday, December 21 confirming it had approved the transaction.
In the earlier part of this decade, AltaGas invested roughly $1 billion developing three run-of-river projects that were part and parcel of the $725 million Northwest Transmission Line project developed by the provincial government to bring power to the Golden Triangle mining district in northwest B.C. The projects were developed with to a 60-year purchase agreement with BC Hydro.
At 195 megawatts, the Forrest Kerr project was the largest run-of-river project in B.C. The other two ROR projects were the 66-MW McLymont and 16-MW Volcano Creek.
The Tahltan acquired 2.7% share in the Volcano Creek project through a $2 million investment, $500 million of which came from the provincial government through the BC Clean Energy Fund.
It will continue to own 2.7% and also has an option to acquire an additional 5%, upon the completion of the sale of the assets to Manulife and Axium.
“Our AltaGas partnership has been very beneficial for the Tahltan Nation and we look forward to continued success as equity partners under the new ownership of Axium and Manulife,” Chad Norman Day, president of the Tahltan Central Government, said in a press release.