Ontario Power Generation Forms Partnerships and Establishes Financing Programs for Lower Mattagami Hydroelectric Redevelopment Project

Ontario Power Generation Inc. (“OPG”) formed Lower Mattagami Energy Limited Partnership (“LMELP”) and Lower Mattagami Limited Partnership (“LMLP”) to redevelop existing OPG hydroelectric generating assets on the Lower Mattagami River in northern Ontario. OPG will contribute the existing generating assets (486 Megawatts [“MW”]) to LMELP, while LMLP will hold the to-be-constructed 438 MW of generating assets. The total project cost is estimated to be approximately $2.6 billion.

A partnership between Peter Kiewit Infrastructure Co. and Leo Alarie & Sons Construction Ltd. will act as contractor for the redevelopment project. LMELP and LMLP have entered into a hydroelectric energy supply agreement (“HESA”) with the Ontario Power Authority for the project.

Osler, Hoskin & Harcourt LLP acted as outside counsel to the Ontario Power Authority on the HESA and related documents in connection with the financing with a team led by Rocco Sebastiano and Jacob Sadikman (energy) and Adrian Hartog (real estate).

Financing for the project will consist of a combination of bonds, bank credit facility and commercial paper. The first component of the financing, comprising a master trust indenture and a credit agreement in respect of a commitment of up to $700 million under the bank credit facility closed on August 17, 2010.

The OPG in-house legal team was led by Earl Stuart and also included Greg Scallen, Clara Greco and David Rinaldo. Blake, Cassels & Graydon LLP acted as outside counsel to OPG on the HESA and in connection with the financing with a team led by Kenneth Pearce that included Ian Binnie (financial services); Edward Perlmutter (real estate); Kathleen Penny (tax) and Leslie Wong, Melanie Sanchez and Victoria Hughes (corporate).

Torys LLP acted as counsel to Bank of Montreal, Canadian Imperial Bank of Commerce, CIBC World Markets Inc. and BMO Nesbitt Burns Inc., with a team led by Rose Bailey and Jonathan Weisz that included Charles Keizer (regulatory) and Nina Mansoori (corporate).

In addition, LMELP set up a commercial paper program for up to $700 million. Blakes also acted as outside counsel to OPG on this program with a team that included Matthew Merkley and Eric Moncik (securities), and Torys acted as outside counsel to CIBC World Markets Inc. with a team that included Rose Bailey (corporate) and Glen Johnson (securities).