Innergex Renewable Energy (INE) Status Update summary

Transaction overview

• Sold a 38% minority interest in three Texas renewable facilities totaling 826 MW to Irradiant Partners for US$188 million (C$257 million), at a 9x 2023 EBITDA multiple and a $68 million premium over book value, including working capital adjustments.

• Sale includes 49.90% of Phoebe solar, 49.90% of Griffin Trail wind, and 22.20% of Foard City wind.

• Proceeds allocated as follows: US$55 million to cancel the Phoebe power hedge, US$114 million for deleveraging, and US$19 million for general corporate purposes.

• Retains operating control and financial consolidation of Texas assets, with no change to 2024 financial guidance as the transaction is neutral to run-rate free cash flow.

• Revenue structure for Foard City and Griffin Trail remains unchanged.

Strategic and financial implications

• De-risks the Texas portfolio by removing the last power hedge, enabling assets like Phoebe to operate at full market potential and increasing exposure to merchant pricing.

• Reduces leverage and crystallizes hidden value, especially in Griffin Trail, while maintaining a high contracted portfolio target of 90%+ over time.

• Transaction is neutral to Free Cash Flow per share on a run-rate basis and strengthens the balance sheet through deleveraging.

• Unlocks full potential of Phoebe asset by removing the power hedge.

• No material impact on near-term financial results; ongoing deleveraging through scheduled debt repayments.

Portfolio management and value creation

• Follows a strategy of recycling capital from existing projects to enhance value, manage risk, and fund growth.

• Recent initiatives include asset sales and refinancing in Iceland, France, Canada, and now Texas.

• Crystallizes value of operating assets and strengthens the balance sheet.

• Focus remains on organic growth in Canada, with limited near-term greenfield activity expected in Texas.

• Capital allocation prioritizes maintaining credit rating, gradual deleveraging, and supporting future growth opportunities.