x
Fort McMurray West
Case studies

Fort McMurray West

€1.433 €1.433 billion bid
€1.38 €1.38 billion of bonds with maturities
€716 €716 million structured deposit note
Background

The Alberta Electric System Operator (AESO) was mandated to procure a 500 km transmission line and two 500 kV substations between Edmonton and Fort McMurray using the first part of the recently approved Competitive Process for the first time. The procurement was for the full life cycle costs associated with the facility.

The selection of the preferred bidder for this project required that the process incorporate the financing costs. The AESO selected Alberta Power Line’s C$1.433 billion bid in December 2014 as the preferred bidder.

Following the selection, the preferred bidder was required to obtain route approval from the Alberta Utilities Commission (AUC) over the following 2 years.

The AUC approved the project in February 2017, which then led to completion of the financial close process.

The AESO and Alberta PowerLine reached financial close on Oct 2, 2017 through the issuance of C$1.38 billion of bonds with maturities ranging from June 2032 to March 2054.

Our Approach

JCRA advised the AESO on the development of a procurement process that involved AUC approval following preferred bidder selection.

We participated in the evaluation of the financial bids that led to the selection of the preferred bidder.

After AUC approval, JCRA advised the AESO on the debt funding competition that was designed during the preferred bidder selection process.

Following the evaluation of the debt funding competition, we advised the AESO on the rate and credit spread setting process leading up to and including financial close.

Benefits

The client was able to resolve a common financing issue that exists when a significant approval is required after preferred bidder nomination and before financial close.

The AESO was able to obtain a competitive price for its project by adopting a process that is well known to the Canadian marketplace and making refinements in order to accommodate unique aspects in Alberta’s regulatory framework.

The introduction of a debt funding competition ensured that any improvements in the financing/capital markets during the regulatory approval stage were adequately considered.

The project reached financial close in October 2017 with the issuance of C$1.38 billion of bonds and a C$716 million structured deposit note.

 

More Project Finance & Infrastructure case studies

Case studies
Hedging advice for a Canadian Infrastructure Sponsor
Project Finance & Infrastructure October 2018
Case studies
Interest rate hedging for M25 road refinancing
Project Finance & Infrastructure October 2018
Case studies
Interest rate hedging for Wren House Infrastructure
Project Finance & Infrastructure October 2018

Contact us

If you need hedging or debt advice or would like to speak about how we could help your business, please get in touch.