Major Canadian pension organization closes CAD10bn purchase of clean energy company
CDPQ Acquires Innergex Renewable Energy in a CAD10 Billion Deal
The Canadian pension fund, Caisse de dépôt et placement du Québec (CDPQ), has announced a significant investment in the energy transition sector with its acquisition of Innergex Renewable Energy. The deal, worth up to CAD10 billion, underscores CDPQ's commitment to renewable energy and reducing carbon emissions.
CDPQ, which manages CAD473 billion for several public pension plans, has been investing in clean energy infrastructure for decades. The fund's recent investment of $200 million in Innergex Renewable Energy is a testament to this commitment, demonstrating a clear focus on renewable energy projects rather than fossil fuels.
The acquisition represents a 58% premium on Innergex's last closing price and an 80% premium on its 30-day average. The deal, which is expected to be completed by the fourth quarter of 2025, is subject to shareholder approval and regulatory clearances.
Innergex's board of directors has unanimously approved the deal, which is also backed by its largest shareholder, Hydro-Quebec. CDPQ plans to syndicate up to 20% of its invested capital to bring in like-minded investors who share its vision for Innergex's growth.
CDPQ has been investing in Innergex since 1995 and plans to maintain the company's headquarters in Longueuil. The pension fund's regional investment in energy transition in Quebec totals CAD196 billion, combining the invested and aimed investment amounts.
The acquisition will accelerate Innergex's renewable energy expansion. The deal offers Innergex shareholders CAD13.75 per share in cash. CDPQ aims to deploy CAD100 billion in the Quebec region by 2026, continuing its strategic focus on sustainability and climate goals.
Notably, CDPQ's mission statement emphasizes avoiding increased oil and coal production. The fund has currently invested some CAD93 billion in Quebec and plans to avoid investments that would increase reliance on fossil fuels. Instead, CDPQ has invested approximately CAD130 billion in listed equities, with a focus on sustainable energy and reducing carbon emissions.
CDPQ's investment in Innergex Renewable Energy aligns with its broader policy to prioritize renewable and low-carbon energy assets, consistent with a transition away from fossil fuels like oil and coal. The fund has also taken a 20% stake in the Sizewell C nuclear power project in the UK, which aims to provide low-carbon, stable power and reduce dependence on fossil fuels.
In summary, the acquisition of Innergex Renewable Energy by CDPQ marks a significant step in the pension fund's commitment to the energy transition and renewable energy. The deal underscores CDPQ's approach to supporting energy sources that contribute to decarbonization and energy security while avoiding investments that would increase reliance on oil or coal production.
CDPQ's latest investment of CAD10 billion in Innergex Renewable Energy showcases their ongoing focus on finance related to clean energy infrastructure. The fund's strategic decision to avoid investments that would increase reliance on fossil fuels demonstrates their commitment to financing renewable and low-carbon energy assets.
