Polaris Infrastructure closes acquisition of 242 MW hydropower projects in Peru

Polaris Infrastructure Inc. has closed the acquisition of 100% of the issued and outstanding shares of Union Energy Group Corp. (UEG). UEG is an owner and developer of run-of-river hydro projects located in Peru.

As part of the UEG acquisition, Polaris Infrastructure has acquired the following assets:

• Canchayllo – a single 5 MW project in operation since 2015;
• Generación Andina – two projects in the late stages of construction totaling 28 MW of generating capacity;
• Karpa – a single 20 MW project with a power purchase agreement (PPA) in place
• Portfolio of early-stage development projects aggregating to approximately 189 MW.

The purchase consideration consists of 600,000 common shares of Polaris Infrastructure, equal to approximately 3.7% of proforma shares outstanding, at closing. Over the two-year period post-closing Polaris will also issue 300,000 warrants exercisable at a 20% premium to the closing share price.

Upon the completion of construction of the Generación Andina projects, Polaris will issue 600,000 shares and CAD396,000 (US$301,774) in cash. In addition, the company will undertake a fundamental restructuring of existing Generación Andina project debt.

In exchange, Polaris agrees to invest necessary capital to bring the Generación Andina​ projects to completion (approximately CAD35 million (US$26.7 million)) and will receive a 15% annual “preferred” return with respect to project level cash flows.