TORONTO, Dec. 17, 2020 /PRNewswire/ - Polaris
Infrastructure Inc. (TSX: PIF) ("Polaris Infrastructure" or the
"Company"), a Toronto-based
company engaged in the operation, acquisition and development of
renewable energy projects in Latin
America, is pleased to announce that its board of directors
has approved revised terms to its Power Purchase Agreement ("PPA")
at its San Jacinto geothermal facility in Nicaragua by its wholly-owned subsidiary
Polaris Energy Nicaragua, S.A. ("PENSA").
After extensive discussions with the Ministry of Energy and
Mines in Nicaragua, the Company is
proud to announce the following as it relates to the continuing
commitment to provide renewable, clean, baseload power to the
country of Nicaragua at long-term
competitive rates:
- The term of the PPA has been extended for an additional 10
years to January 2039.
- A non-indexed $110.00 USD per
Mwhr price versus the current $130.712
USD per Mwhr price in 2020.
- Contractual confirmation for Polaris Infrastructure to include
a Binary Unit of up to 10MW's.
- An extension of two years to the income tax holiday such that
income taxes will now be payable in 2025 versus 2023.
- The previous price penalty clause requiring a minimum power
production delivered has been eliminated.
- The amended terms are to take effect immediately.
The amended PPA has been signed by both parties and has received
consent from all project lenders and the board of directors.
The concession agreement and generation license will be amended to
incorporate such changes, which we expect to be completed in
January.
The desire to construct the binary unit at the San Jacinto
facility, combined with the 2029 expiration of our existing PPA,
provided the context to renegotiate the terms of the existing
contract. The Company believes the aforementioned parameters
of this revised PPA will allow for significant realization of free
cash flow over an extended period of time. The Company is
confident that the combination of the extended term, increased tax
holiday, long-life of the asset and the addition of the binary unit
will provide the opportunity to refinance the existing project loan
on terms that are favourable to shareholders.
The Company reiterates its continued commitment to its current
dividend policy for the foreseeable future.
"The revised terms of the PPA enable Polaris to provide a
competitive source of baseload, renewable energy to the Nicaraguan
market. The combination of the long-life nature of our asset
and the ability to grow the production provides a win-win for both
parties," commented Marc Murnaghan,
CEO of Polaris Infrastructure. "In my opinion, such new terms
and the fact that our Company now has an average remaining life of
over 18 years on all its PPAs should be viewed positively by market
participants."
The Company will be holding an investor call on Friday,
December 18th, 2020 at 09:00 am
(eastern standard time), which will be made available
through the following call-in details in order to discuss the
amended and extended PPA and answer any questions associated with
this announcement:
Topic: Polaris Infrastructure Announces Amended and
Extended PENSA Power Purchase Agreement
Company name: Polaris Infrastructure Inc.
Participant Toll Free Dial-In Number: 1 (888) 231-8191
Participant International Dial-In Number: (647)
427-7450
A digital recording of the earnings call will be available for
replay two hours after the call's completion.
Replay Call Information
Toronto and international: 1 (416) 849-0833,
Passcode: 2856157
North America (toll-free):
1 (855) 859-2056, Passcode: 2856157
Encore Replay Expiration Date: 12/25/2020
Cautionary Statements
This news release contains certain "forward-looking information"
within the meaning of applicable Canadian securities laws, which
may include, but is not limited to, the construction of the
Company's binary unit in San Jacinto, the opportunity to refinance
the San Jacinto project loan on terms that are attractive to
shareholders, the ability to off-set any short-term reduction in
revenue from the lower price per Mwhr under the amended PPA and the
maintenance of the Company's existing dividend policy. Such
forward-looking information reflects management's current beliefs
and is based on information currently available to management.
Often, but not always, forward-looking statements can be identified
by the use of words such as "plans", "expects", "is expected",
"budget", "estimates", "goals", "intends", "targets", "aims",
"likely", "typically", "potential", "probable", "projects",
"continue", "strategy", "proposed", or "believes" or variations
(including negative variations) of such words and phrases or may be
identified by statements to the effect that certain actions, events
or results "may", "could", "should", "would", "might" or "will" be
taken, occur or be achieved.
A number of known and unknown risks, uncertainties and other
factors may cause the actual results or performance to materially
differ from any future results or performance expressed or implied
by the forward-looking information. Such factors include, among
others: failure to discover and establish economically recoverable
and sustainable resources through our exploration and development
programs; imprecise estimation of probability simulations prepared
to predict prospective resources or energy generation capacities;
inability to complete hydro projects in the required time to meet
COD; variations in project parameters and production rates; defects
and adverse claims in the title to our properties; failure to
obtain or maintain necessary licenses, permits and approvals from
government authorities; the impact of changes in foreign currency
exchange and interest rates; changes in government regulations and
policies, including laws governing development, production, taxes,
labour standards and occupational health, safety, toxic substances,
resource exploitation and other matters; availability of government
initiatives to support renewable energy generation; increase in
industry competition; fluctuations in the market price of energy;
impact of significant capital cost increases; unexpected or
challenging geological conditions; changes to regulatory
requirements, both regionally and internationally, governing
development, geothermal or hydroelectric resources, production,
exports, taxes, labour standards, occupational health, waste
disposal, toxic substances, land use, environmental protection,
project safety and other matters; economic, social and political
risks arising from potential inability of end-users to support our
properties; insufficient insurance coverage; inability to obtain
equity or debt financing; fluctuations in the market price of our
Shares and Warrants; impact of issuance of additional equity
securities on the trading price of our Shares and Warrants;
inability to retain key personnel; the risk of volatility in global
financial conditions, as well as a significant decline in general
economic conditions; uncertainty of political stability in
countries where we operate; uncertainty of the ability of
Nicaragua and Peru to sell power to neighboring countries;
economic insecurity in Nicaragua
and Peru; and other development
and operating risks, as well as those factors discussed in the
section entitled "Risk Factors" in the Company's Annual Information
Form for the year ended December 31,
2019 which is available on SEDAR. These factors should be
considered carefully, and readers of this news release should not
place undue reliance on forward-looking information.
Although the forward-looking information contained in this news
release is based upon what management believes to be reasonable
assumptions, there can be no assurance that such forward-looking
information will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
information. Accordingly, readers should not place undue reliance
on forward-looking information. The information in this news
release, including such forward-looking information, is made as of
the date of this news release and, other than as required by
applicable securities laws, Polaris Infrastructure assumes no
obligation to update or revise such information to reflect new
events or circumstances.
About Polaris Infrastructure
Polaris Infrastructure is a Toronto-based company engaged in the
operation, acquisition and development of renewable energy projects
in Latin America. Currently, the Company operates a 72MW
geothermal project located in Nicaragua and a 5MW as well as another 28 MW
of run-of-river projects located in Peru.
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SOURCE Polaris Infrastructure Inc.