OPTrust and Kineticor Resource Corp. project financing of $1.5-billion Cascade Power Project

Kineticor Resource Corp. (“Kineticor”), with joint development sponsors, Macquarie Capital (“Macquarie”) and Ontario-based pension fund OPTrust, and project sponsors, OPTrust, Axium Infrastructure and DIF Capital, successfully closed financing on the $1.5 billion Cascade Power Project (“Cascade”).

OPTrust’s equity investment in the project is structured through an innovative and precedent setting partnership with a consortium of six Alberta First Nations represented by Backwoods Energy Services, which structured and led the transaction on behalf of the Indigenous communities. This equity investment also marks the first transaction supported by the Alberta Indigenous Opportunities Corporation (AIOC), who provided a loan guarantee supporting the credit and financing arrangements between ATB, OPTrust, Kineticor and the First Nations consortium which ultimately facilitated the equity participation by Indigenous communities in the Cascade project. The transaction involved: (i) formation and governance arrangements relating to the partnership between OPTrust, Kineticor and the Alexis Nakota Sioux Nation, Enoch Cree Nation, Kehewin Cree Nation, O’Chiese First Nation, Paul First Nation and Whitefish Lake First Nation, all as represented by Backwoods Energy Services, an Alexis Nakota Sioux Nation business venture; (ii) the negotiation and implementation of the ATB credit facility and financial support from AIOC; and (iii) support the OPTrust team on the Cascade level equity syndication transaction and project financing.

Kineticor Resource Corp. is an Alberta-based developer and manager of clean power projects across Canada specializing in projects with an environmental and economic advantage.

DIF Capital Partners is a leading global independent infrastructure fund manager, with €7.6 billion of assets under management across nine closed-end infrastructure funds and several co-investment vehicles. DIF invests in greenfield and operational infrastructure assets located primarily in Europe, the Americas and Australasia.

Cascade is a 900-megawatt combined cycle natural gas-fired generating facility to be located near Edson, Alberta. Siemens Energy will provide two highly efficient single shaft SCC6-8000H power trains and provide maintenance support under a long-term service agreement. Cascade is strategically situated in proximity to significant gas production as well as the NGTL System and high voltage electrical transmission lines, an important competitive advantage for Cascade. Construction will start immediately with commercial operations commencing in 2023. Cascade is contracted and benefits from long-term gas netback agreements which provide cashflow stability and downside protection once the project is commissioned.

Bennett Jones LLP represented OPTrust with a team including
Vivek Warrier
Denise Bright, 
Ashley White, 
Megan Ollivier,
Kathryn Shaw.

Torys LLP represented Cascade Power Project Limited Partnership (“Cascade”) with a team led by
Scott Kraag
and consisting of 
Milosz Zemanek (project finance), 
Chris Christopher (M&A), 
Ian Gordon, 
Amy Maginley, 
Vidushi Hora, 
Collin Intrater,
Jessie Mann (corporate/energy), 
Simon Williams, 
Yinka Olusoga,
Brianna Cowling (debt finance), 
Andrew Bedford (real estate), 
Craig Maurice (tax), 
Gino Bruni (regulatory).

Osler, Hoskin & Harcourt LLP advised Kineticor Resource Corp. with a team led by
Lorne Carson
and consisting of 
Allan Morgan (corporate), 
Elliot Smith (commercial), 
Martin Ignasiak (regulatory, environmental, Aboriginal and land), 
Dana Saric (financial services).

Stikeman Elliott LLP acted for AIOC with a team including
Leland Corbett
Amy Nugent, 
Cheryl Rea, 
Alain Saint-Onge.

McCarthy Tétrault LLP acted for ATB as lenders to McLeod River Power Group LP, the partnership formed between OPTrust, Kineticor and the Indigenous communities, with a team including
James-Scott Lee,
Christina Grimes,
Audrey Bouffard-Nesbitt.

McCarthy Tétrault LLP also acted for the senior secured lenders providing project financing to Cascade Power Project Limited Partnership, with a team including
Stephen Furlan,
Joseph Palin (co-lead counsel),
Lynn Parsons,
Trevor Morawski,
Candace Pallone,
Genevieve Loxley (financial services),
Seán C. O'Neill,
Brian Bidyk,
Zachary Masoud,
Etienne Ravilet Guzman,
Firuz Rahimi,
Kimberly Howard,
Jamie Gibb (power),
Mark Christensen,
David Meier (real estate),
Anca Neacsu,
Scott Chalmers (infrastructure).

Davies Ward Phillips & Vineberg LLP was counsel for Axium Infrastructure with a team including
Anthony Spadaro
Nicholas Williams, 
Marc Pontone, 
Sarah Powell, 
Christopher Anderson,
Marc André Gaudreau Duval.

DLA Piper (Canada) LLP acted for DIF Capital Partners with a team including
Andrew Burton,
Mike Styczen,
Veronica Monteiro,
Catherine Gibson,
Andrew McFarlane,
Catherine Pawluch,
Alex Sibley,
Natasha Rana,
Matthew Pollock,
Lauren Storwick,
Mitchell Smith,
Prasad Taksal.

Miller Thomson LLP (Calgary) represented Backwoods Energy Services with a team including 
Ken Phillips, 
Aimee Halfyard,
Shashi Malik (corporate/M&A),
Michael Morcom,
Kyle Cadieux (financial services).

Duncan Craig LLP (Edmonton) acted for Alexis Nakota Sioux Nation and Indigenous Community Syndicate Limited Partnership.

Witten LLP acted for Enoch Cree Nation and Kehewin Cree Nation led by Keltie Lambert.

Biamonte LLP acted for O’Chiese First Nation and Paul First Nation led by Brian Brendzan.

Bailey & Wadden LLP acted for Whitefish Lake First Nation led by Ian Bailey.

Macquarie acted as exclusive financial advisor and debt arranger to the partnership, securing non-recourse project financing.

See more information about the deal here: https://www.osler.com/en/expertise/deals-cases/kineticor-resource-corp