2024
Annual Report
For 35 years,
Innergex has believed
in a world where
abundant renewable
energy promotes
healthier communities
and creates shared
prosperity.
Table of Contents
Message to Shareholders
11
Management’s Discussion and Analysis
29
Responsibility for Financial Reporting
84
Independent Auditor’s Report
85
Consolidated Financial Statements
89
Notes to the Consolidated Financial Statements
95
As an independent renewable power
producer which develops, acquires, owns
and operates run-of-river hydroelectric,
wind, solar and energy storage facilities,
we are convinced that generating power
from renewable sources will lead the way
to a better world.
United by a common vision, we are
evolving as an international company,
leaving a positive footprint in Canada,
the United States, France and Chile.
Our work benefits the planet and
communities for our generation and
those to come. We harness the energy
from the sun, the wind and the water,
coupled with the energy of people who
want to make a greener world go around.
Innergex conducts operations in
Canada, the United States,
France and Chile and follows a
sustainable development
philosophy that balances
people, our planet and
prosperity. Our approach to
building shareholder value is to
generate sustainable and
growing cash flows per share
and provide an attractive risk-
adjusted return on invested
capital.
Innergex’s shares are listed on
the Toronto Stock Exchange
(“TSX”) under the symbols INE,
INE.PR.A and INE.PR.C and our
convertible debentures are
listed under the symbols INE.
DB.B and INE.DB.C.
1
2024 Annual Report
We are building
a better world
with renewable
energy.
Our Mission
Together,
our energy creates
a new current.
Our Vision
Our Values
We believe in a better world where
abundant renewable energy
promotes healthier communities
and creates shared prosperity.
Innergex contributes to this vision
by leveraging its long-term
commitment, proven expertise,
entrepreneurial spirit, and
innovative approach. We will
continue to generate value for
our employees, our shareholders,
At Innergex, the passion,
innovation and talent of our team
create an unprecedented positive
energy. Each and every one of us
embodies the values that drive our
daily work. These seven values
support our vision, shape our
culture and reflect our core values.
our partners and our host
communities today to contribute
to a more sustainable world for
future generations. We remain
committed to responsible growth
that balances people, our planet,
and prosperity. We believe in
offering an engaging, inclusive and
supportive work environment
where each team member can
thrive.
• Follow Your Passion
• Lead With Integrity
• Achieve Together
• Get involved
• Act Safely
• Drive Opportunities
• Generate Prosperity
Why Invest
A Globally Diversified 100% Renewable Energy Player
• We are a full life cycle, 100% renewable energy company with 35 years of experience in developing, acquiring, owning,
and operating hydroelectric, wind, solar and energy storage facilities in Canada, the United States, France and Chile.
• We manage a large and broadly diversified portfolio of assets currently consisting of interests in operating facilities with an
aggregate net installed capacity of ~3.7 GW (gross ~4.6 GW).
• We also hold interests in various under construction, under development, and prospective projects with an aggregate gross
installed capacity totaling ~11.9 GW which provides significant optionality for accretive growth.
• Our balanced portfolio is core to our risk management strategy, with diversification across geographies and technologies
helping to mitigate various risks.
Disciplined Approach Supports Sustainable Value Creation
• Our long-term value creation approach is based on leveraging our enduring competitive advantages to capture the strong
growth in the demand for renewable energy while remaining disciplined with our capital allocation and selectively pursuing
the most attractive investments on a risk-adjusted return basis.
• We are focused on a self-funded growth strategy, leveraging our access to diverse sources of capital to pursue our growth
ambitions while maintaining an investment-grade balance sheet.
• We target double-digit levered after-tax returns to drive sustainable Free Cash Flow per share growth, which complements
our 30% to 50% of Free Cash Flow target dividend payout ratio and supports our total shareholder return proposition.
A High-Quality Asset Base
• We operate a highly contracted portfolio which provides predictable and inflation-indexed revenues.
• We look to conservatively finance our projects primarily on a long-term, low-risk basis with fixed-rate, non-recourse borrowings.
• Our diverse production base includes a significant portion of long-lived hydro assets that enhance overall portfolio quality
and cash flow durability.
4
countries: Canada, United
States, France and Chile
4,663
MW of gross
installed capacity
$9.4 B
Total Assets
11,400
GWh of proportionate
energy produced
600+
employees
90
clean energy facilities
4
2024 Annual Report
Global
Diversification
42
run-of-river hydro facilities
9
solar
facilities
36
wind facilities
3
battery energy
storage facilities
5
2024 Annual Report
Financial Key Performance Indicators
Cash Flows from Operating
Activities and Free
Cash Flow1 ($M)
Cash Flows
from Operating
Activities
Free Cash Flow1
2024
292.2
213.9
2022
2023
297.9
430.2
172.0
214.9
Revenues and Revenues
Proportionate and Adjusted
EBITDA and Adjusted
EBITDA Proportionate ($M)
Revenues
and PTCs
Adjusted
EBITDA1
Joint Ventures
Adjusted EBITDA
Proportionate1
Production and Production
Proportionate (GWh)
Production
Joint Ventures
2023
10,621.5
11,160.6
539.1
2024
10,885.0
11,399.6
514.6
2022
10,254.0
10,792.1
538.1
Key
Figures
Innergex measures its
performance using operating
and financial key performance
indicators (“KPIs”). Innergex
believes that these indicators
provide management and the
reader with additional information
about its production and cash-
generating capabilities, as well
as its financial strength.
These indicators are not
recognized measures under IFRS,
have no standardized meaning
prescribed by IFRS and therefore
may not be comparable to those
presented by other issuers. Please
refer to the “Non-IFRS Measures”
section for more information.
1 This is not a recognized measure under IFRS and therefore
may not be comparable to those presented by other issuers.
Please refer to the “Non-IFRS Measures” section for more
information.
2022
2023
612.2
658.9
687.7
735.3
995.8
935.2
1 ,102.7
1,041.6
61.6
60.6
2024
760.6
709.7
1,113.6
1,047.2
66.4
6
2024 Annual Report
2024
4,663
2022
4,193
2021
3,800
2020
3,694
2019
3,488
2018
2,888
2017
1,840
2023
4,293
1,271
2,608
690
94
Operational Key Performance Indicators
Gross Installed Capacity by
Source of Energy (MW)
Gross Installed Capacity
by Country
Canada
43%
Chile
16%
France
7%
United States
34%
Hydro
Wind
Solar
Storage
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2024 Annual Report
Environmental, Social
and Governance (ESG) KPIs (as at December 31)
Our mission to build a better world
with renewable energy is told
through our ESG journey. Since
2014, we have made great progress
on advancing the quality of our
disclosures, and the quantity
and quality of metrics we provide.
By sharing our sustainability
initiatives and performance
efforts, we empower not only
ourselves, but our investors, our
partners, and other stakeholders,
to make informed decisions. The
Board fully supports our ESG
efforts to help our stakeholders
understand that sustainability is
in our DNA. As a 100% renewable
energy company, we are proud
to offer investors the opportunity
to invest in projects that help build
a more sustainable future.
% Women in Management Positions
0
0.18
0
Renewable Energy Generation (GWh)1
Workdays Lost Due to Occupational
Injuries and Disease2
10,792
11,161
11,400
1 Equivalent to Innergex’s Production Proportionate.
2 The lost day rate is the number of calendar days lost due
to a workrelated injury or disease (excluding contractors)
per 200,000 worked hours.
2024
2022
2023
2024
2022
2023
2022
2023
2024
27.5
28.3
26.9
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2024 Annual Report
% of Women on the Board of Directors
As at December 31
Contributions to Employee Retirement Plans3
Average Voluntary Turnover Rate
3 For Canadian and US employees. Employees in France and
Chile are covered by different retirement systems.
2022
2023
2024
36
40
40
2022
2023
2024
$1.6M
$1.8M
$2.0M
2022
2023
2024
10.3
7.1
8.8
9
2024 Annual Report
Clean energy
produced
cleanly
Message to Shareholders
As we reflect on the progress made in 2024, we are
reminded of both the urgency of addressing climate
change and the transformative potential of the global
energy transition. Record-breaking heatwaves and
shifting climate patterns are pushing us closer
to critical thresholds and underscore the need for
immediate action. Yet, within these challenges lies
a clear path to a sustainable and prosperous future.
The transition to renewable energy is more than
a climate imperative—it is also an unprecedented
economic opportunity. Advances in artificial
intelligence, the expansion of data centers, and
electrification trends have propelled this shift forward,
driving energy demand to new heights. At Innergex,
we view this transition as an opportunity to address
pressing climate challenges while fostering growth,
innovation, and long-term value creation.
Our Commitment to Disciplined Growth
We understand that growth must be strategic, disciplined, and
sustainable. In 2024, we focused on identifying opportunities
in our core markets, ensuring each decision contributes to
our long-term success and creates value for our shareholders.
A key part of our strategy was our decision to change our capital
allocation strategy in 2024, shifting our focus to reinvesting
capital into our development activities to accelerate our
expansion and increase our long-term growth potential. This
decision wasn’t made lightly but reflected our confidence
in the growth opportunities ahead and our commitment to
positioning Innergex as a global leader in renewable energy.
And it really paid off.
In 2024 alone, we signed 30-year, inflation-indexed power
purchase agreements (PPAs) for nearly 1 GW of newly awarded
wind capacity in Canada, and secured a 350 GWh per year,
15-year corporate contract in Chile.
Our development teams have achieved remarkable milestones
this year, with significant participation in energy procurement
tenders and expanding our prospective portfolio to add
optionality across our core markets in Canada, the United States,
France, and Chile. These achievements continue to strengthen
our market position, support our diversification strategy, and
pave the way for disciplined growth.
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2024 Annual Report
Winning Big in Canada’s Latest Energy RFPs
In 2024, we solidified our leadership position in Canada’s
renewable energy sector by securing nearly 1 GW of new wind
projects, positioning us for robust, accretive growth in the
coming years. This achievement highlights the strength of
our development team and portfolio, our focus on developing
competitive renewable energy projects, our role as a partner
of choice, and our dedication to advancing Canada’s energy
transition. By diversifying our portfolio, we are not only supporting
disciplined growth but also reinforcing our commitment to
creating long-term value for all our stakeholders.
We are proud that all our winning projects this year are built on
strong partnerships with Indigenous and local communities.
Partnerships are the backbone of our development philosophy.
Together with our partners, we aim to create projects that not
only generate clean energy and are profitable, but also provide
lasting and meaningful benefits to Indigenous and local
communities. As we continue to build these long-term
partnerships, we are confident in our ability to deliver sustained
value to both the communities we serve and our shareholders.
In Quebec, we signed 30-year PPAs with Hydro-Québec for two
new projects:
• Lotbinière Ndakina Wind Project (100 MW): a partnership
with the RCM of Lotbinière and two First Nations communities,
the Abenaki Councils of Odanak and Wôlinak.
• Peshu Napeu Wind Project (300 MW): led by the Innu Council
of Pessamit, in partnership with the RCM of Manicouagan.
In British Columbia, three of our wind projects were selected in
BC Hydro’s latest Call for Power, resulting in the signing of
30-year PPAs in December for:
• K2 Wind Project (160 MW): a partnership with Westbank
First Nation.
• Nithi Mountain Wind Project (200 MW): a partnership with
Stellat’en First Nation.
• Stewart Creek Wind Project (200 MW): a partnership with
West Moberly First Nations.
Driving Development and
Construction in Our Core Markets
In the United States, our construction team completed
construction of our flagship Boswell Springs project in Wyoming.
Boasting a substantial 330 MW of installed capacity and backed
by a 30-year power purchase agreement, Boswell Springs has
reached full commercial operation in December.
Additionally, the 30 MW Hale Kuawehi solar and 30 MW/120 MWh
(4 hours) battery storage project in Hawaii is now fully built, and
the project commissioning is nearing completion.
Our development portfolio also continues to expand, with the
Palomino solar project (200 MW) receiving its interconnection
permit, as we are actively seeking an offtaker to secure long-term
revenues. Our efforts underscore our dedication to driving the
energy transition across the United States.
In Chile, we expanded our leadership position in the renewable
energy sector. Key accomplishments in 2024 included the
commissioning of the San Andrés battery energy storage facility,
a 35 MW/175 MWh (5 hours) facility which stores renewable
energy produced during the day and dispatches it during peak
demand periods, when prices are higher.
We also secured a long-term PPA to supply 350 GWh of energy
annually to Codelco, the world’s largest copper producer,
strengthening our position as a trusted energy partner in
the region. This showcases the powerful synergy between
clean energy and industrial transformation, demonstrating
how renewable energy can drive both environmental and
economic benefits.
We also added a complementary 2.7 MW run-of-river hydro
facility to our operating portfolio and are moving forward with
construction on two new battery energy storage projects totaling
62 MW/310 MWh (5 hours). These initiatives are aligned with our
disciplined approach to building a diversified portfolio of assets
which can be leveraged to secure partnerships with premier
corporate offtakers in Chile.
12
2024 Annual Report
In France, we advanced development activities on several wind
projects such as Auxy Bois Régnier (29 MW), Pointe à Neveu
(17 MW), Oratorio (8 MW) and Montjean 2 (14 MW). The Grenier
des essences solar project (67 MW) also successfully navigated
the permitting process and is progressing to the development
stage, and we recently acquired La Cense, a 13 MW wind project
under development. In total, it represents 148 MW that will be
added to our French portfolio in the coming years, thanks to the
hard work of our development team in France.
We have also begun internalizing operations at some of our
French sites to better manage equipment availability and
resources, allowing us to take advantage of market dynamics
and improve cash flows.
Looking Ahead
Unfortunately, there are still some who will tell you that what you
are seeing with your own eyes, or even experiencing in real time,
is not happening. Climate denialism has been relentlessly pushed
by industry lobbyists and political agendas in an effort to undermine
global efforts to reduce man-made carbon emissions. The reality
is every year we see temperatures break a new record. Every
year the amount of economic loss attributed to climate change
exceeds the previous one. It has now become commonplace to
witness entire communities being burned off the map. These
recent developments have also had a negative impact on the
share price of publicly listed pure play renewable energy
producers across the board, and Innergex has not been spared.
We remain steadfast in our belief that the electrification and
decarbonisation of our economies is the key to not only sharing
prosperity, job creation, and sustainable growth, but will also
address the immediate needs to avert a further climate crisis.
Looking ahead, we are focused on enhancing operational
efficiency and profitability while expanding our renewable energy
portfolio to meet the rising demand for clean, reliable energy.
With a diversified portfolio and a disciplined approach, Innergex
is well-positioned to seize opportunities in the evolving
energy landscape.
Our teams continue to enhance our development portfolio,
submitting competitive projects based on strong partnerships
into upcoming energy procurement opportunities across all our
markets. To support this growth, we have strategically leveraged
various funding levers through several completed financing
initiatives, including a notable transaction with Irradiant Partners,
LP, through the sale of minority interests in our Texas renewable
energy portfolio. This has strengthened our balance sheet,
enhanced asset quality, improved liquidity, and optimized
asset performance.
By embracing cleaner energy solutions, we are contributing to the
fight against climate change while driving economic prosperity
and creating a brighter future. Your trust inspires us to aim higher.
Together, we are shaping the energy transition—environmentally
and economically.
As we continue to write Innergex’s story, one truth remains
constant: the future is renewable, and together, we will power it.
Thank you for your unwavering support as we pursue our mission,
even amid market fluctuations in the renewable energy sector.
You are an essential part of this journey.
Monique Mercier
Chair of the Board
of Directors
Michel Letellier
President and Chief
Executive Officer
“I would like to welcome our new
Chair of the Board, Monique
Mercier. On behalf of the Innergex
team, we thank Daniel Lafrance
for his leadership and dedication
since the early 2000s. We are
excited to have Monique, a
seasoned and highly respected
leader, step into this role and we
look forward to working together
to drive our mission forward.”
13
2024 Annual Report
Our 2024
Corporate
Achievements
In 2024, we successfully
delivered on our corporate
priorities, demonstrating
our ability to execute on
our commitments. We are
proud of our teams’ efforts
for achieving significant
milestones across various
aspects of our business.
These achievements
reinforce our commitment
to our disciplined, self-
funded growth strategy
and position us well for
continued success.
Growth
Financing &
Capital Allocation
Partnerships &
Other
• Leveraged our competitive
advantages in Canada to be the
leading awardee in requests for
proposals (RFPs) in both Quebec
and British Columbia, with
960 MW of wind projects selected
and 30-year, inflation-indexed,
take-or-pay PPAs signed.
• The 330 MW Boswell Springs
Wind Project in Wyoming was
commissioned, underscoring
our expertise in delivering large-
scale renewable energy projects.
• Pursued our diversified growth
strategy in Chile, with several
complementary project
additions totaling 38 MW and
175 MWh of storage capacity,
while advancing 62 MW /
310 MWh of battery energy
storage projects to the
construction phase.
• Ramping up on our development
activities, with nearly 1 GW of
projects advancing to the
development stage and the
continued expansion of our
prospective portfolio.
• Update on our capital allocation
strategy to revise our annual
dividend to $0.36 per common
share as part of a strategic move
to accelerate growth, reduce
reliance on external factors,
and enhance our capacity for
sustainable growth, ultimately
fostering long-term shareholder
value.
• Executed on the sale of minority
interests in our Texas operating
portfolio for ~US$186 million,
unlocking value for shareholders,
materially de-risking our Texas
assets, enhancing portfolio
quality, and strengthening our
balance sheet.
• Executed on several financing
initiatives in North America for
total aggregate gross amounts
of approximately $450 million to
optimize the financial structure
of our assets, enhance our
liquidity and maintain financial
flexibility.
• Selected for five projects
totaling 960 MW of wind capacity
in Canada in Quebec and British
Columbia, with each project
co-developed with Indigenous
and/or local communities,
showcasing Innergex’s
leadership in advancing
renewable energy in Canada
and reinforcing our status
as a trusted partner for local
and Indigenous communities.
• Signed a 15-year PPA with
Codelco, the world’s largest
copper producer, in Chile for
350 GWh per year of clean
energy, highlighting the
expansion of our corporate
partnerships and our ability to
deliver valuable clean power
solutions, attract top-tier
offtakers, diversify our client
base, and enhance our cash
flow profile.
• Innergex named one of Canada’s
Best Corporate Citizens,
securing a position in the Top 5
for the third consecutive year in
Corporate Knights magazine’s
ranking, demonstrating our
commitment to sustainability
excellence.
Corporate Governance
Board of Directors
Innergex thrives under the
guidance of a Board of Directors
responsible for the stewardship
of the Corporation. Its mandate
is to oversee the management
of the business and affairs of
Innergex while championing the
highest sustainability standards
and shareholders’ best interests.
Members of the Board are
elected at each Annual General
Meeting of Shareholders.
Monique Mercier
Independent Chair
of the Board
Joined: October 2015
Nathalie Francisci
Independent
Joined: May 2017
Marc-André Aubé
Independent
Joined: December 2023
Ouma Sananikone
Independent
Joined: February 2019
Richard Gagnon
Independent
Joined: May 2017
Pierre G. Brodeur
Independent
Joined: May 2020
Radha D. Curpen
Independent
Joined: December 2022
Michel Letellier
Non-Independent
Joined: October 2002
Patrick Loulou
Independent
Joined: May 2024
Jean-Hugues Lafleur
Non-Independent
Joined: May 2024
Julie Turgeon
Vice President –
Construction
Joined: 2023
Alex Couture
Senior Vice-President –
Development
North America
Joined: 2022
Robert Guillemette
Vice President –
Technical Services
Joined: 2018
Yves Baribeault
Chief Legal Officer
and Secretary
Joined: 2009
Patrick Beaudoin
Vice President – Asset
Optimization and
Procurement
Joined: 2018
Niko Nikolaidis
Vice President –
Finance
Joined: 2017
Jacques Desrochers
Vice President –
Information and
Operational Technologies
Joined: 2023
Guillaume Jumel
Vice President and
Managing Director –
France
Joined: 2011
Michel Letellier
President and Chief
Executive Officer
Joined: 1997
Colleen
Giroux-Schmidt
Vice President –
Corporate Relations
and Environment
Joined: 2011
Chantal Lussier
Vice President –
Taxation
Joined: 2004
Jean Trudel
Chief Financial Officer
Joined: 2002
Pascale Tremblay
Chief Asset Officer
Joined: 2021
Jaime Pino
Vice President and
Managing Director – Chile
Joined: 2021
Executive Management
16
2024 Annual Report
Awards, Recognition
and Commitments
Awards
ESG Ratings
Recognitions
Commitments
• Bronze award in Innovation for
the Carleton wind farm for
recognition of high labour
standards, pay equity, and
occupational health and safety
• Renewable Energy Storage
Innovation Award from RENMAD
Chile for our Salvador PV facility
• President and CEO
Michel Letellier received the
Personality of the Year Award
presented by Nergica
• Corporate Knights Best 50
Corporate Citizens in Canada
– 4th place
• Ranked #16 in Newsweek’s
Canada’s Most Responsible
Companies 2025: for our
commitment to the climate,
social welfare, and responsible
governance
• 9th place in Better Companies
2023 listing of top 10 Latin
American companies
• Bronze Parity Certification
Women in Governance
• Signatory to the Equal by
30 Campaign
Since 2019, Innergex has been
actively working towards equal
pay, equal leadership, and equal
opportunities for women in the
clean energy sector by 2030
through this joint Clean
Energy Ministerial (CEM) and
International Energy Agency
(IEA) initiative.
• Signatory to the Action
Declaration on Climate Policy
Engagement
Innergex, long a leader in working
with policymakers on climate
change reduction strategies
and goals, committed to align
its climate policy activities in
accordance with the Paris
Agreement, lending its voice and
leadership to a strategy to close
the say–do gap on countries’
emission reductions.
• Signatory to the Solar Industry
Forced Labor Prevention Pledge
Innergex is committed to helping
ensure that the solar supply
chain is free of forced labour by
supporting the development of
an industry-led solar supply
chain traceability protocol.
Laggard
CCC
B
BB
BBB
A
AA
AAA
Leader
D-
D
D+
C-
B-
B
B+
A-
A
A+
C
C+
Poor
Medium
Good
Excellent
Severe
High
Medium
Low
Negligible
Laggard
Leader
F
D-
D
C-
C
B-
B
A-
A
Laggard
Leader
ESG Risk Rating
17
2024 Annual Report
PEOPLE
Career solutions for people passionate
about making a difference
Attracting and retaining the right mix of people is essential
for Innergex to thrive in an increasingly competitive and rapidly
evolving industry. By offering generous compensation and
extended benefits, a healthy work/life balance, a dynamic and
collaborative work environment, and an opportunity to help build
the better world of tomorrow, Innergex can attract and retain
leading industry talent, as well as the next generation of leaders.
By providing the tools, resources, and support required for
our employees to shine, we ensure our continued growth and
success to face the climate challenge head on.
Health and Safety
The well-being of our employees is paramount at Innergex.
Overseen at the Executive Management level by the Chief Asset
Officer, our Health and Safety Management System (HSMS) has
been structured in a Plan-Do-Check-Act format which aligns to
the requirements outlined in ISO45001 Occupational Health and
Safety Management Systems Standard. The aim of the HSMS is
to prevent work-related injury and ill-health to workers and to
provide a safe and healthy workplace. Our target is to have zero
lost days due to injury and work-related fatalities.
Diversity, Equity, and Inclusion (DEI)
In 2024, Innergex launched a DEI Committee made up of team
members representing every jurisdiction in which we operate.
We are committed to adhering to best industry practices, and
creating a diverse and inclusive workplace. Our Diversity and
Inclusion policy aims to help Innergex thrive in a competitive
economic environment by inspiring creativity, promoting
different perspectives, improving performance and innovation,
facilitating recruitment, and increasing retention.
Innergex’s approach to employee satisfaction
• Employee Share Purchase Plan
• Retirement plan matching contributions
• Telework policy
• Equal remuneration
• Career development opportunities
• Paid sick leave
• Parental leave supplemental allowance
• Employee Volunteer program
• Employee electric vehicle incentive program
• Employee recognition program
• Social events
• Summer hours program
• Scholarship program for employee dependants
• Diversity, Equity & Inclusion policy
• Health & Safety policy
• Whistle-Blowing policy
• Workplace Environment Free of Harassment, Violence and
Bullying policy
Total Recordable Injury Frequency rate
Real Solutions for a Warming World
Calculated as (statistic count × 200,000) / hours worked.
1.63
2022
1.59
2023
1.57
2024
18
2024 Annual Report
PLANET
Tangible solutions to combat climate change
Innergex is focused on strategies, actions, and growth that
helps decarbonize the global economy by being a leader in the
transition to a net zero economy to drive our future prosperity.
Innergex strives to be a responsible global corporation that
generates real, tangible solutions to the issue that affects us all,
a warming world. Our success in addressing climactic challenges
while providing sustainable economic opportunities and shared
economic wealth is proof that we are on the right course.
Climate Change Risk Management
The Board of Directors is responsible to review and assess
material risks associated with the Corporation’s business, which
may adversely affect it, its activities, its financial condition or
reputation including climate-related risks. More specifically,
the Board of Directors ensures that the Corporation has
implemented systems to effectively identify, manage, and
monitor the principal risks associated with its business and to
mitigate or reduce their potential negative impacts. Climate
change impacts play a key role in the continued viability of our
existing assets, and Innergex’s strategic decision-making
includes the consideration of climate-related risks.
Greenhouse Gas Emissions
Fighting climate change is one of the key principles driving our
work at Innergex. Generating renewable energy exclusively
means we are a low emitter of greenhouse gas relative to other
energy sources. Our results illustrate that the electricity we
produce from renewable sources has no significant GHG
emissions in its generation, contributing to further reducing CO2
emissions from other sources in our business operations.
Innergex’s approach to sustainable
development
• CDP Climate submissions
• Sustainable Development policy
• Climate change risk management
• GHG emission accounting
• TCFD aligned Climate Assessment Report
• Protecting biodiversity
• Stakeholder consultations
• Managing water resources
• Waste and hazardous waste management programs
• Compliance with laws, permits, and regulations
• Vegetation management
• Land management
Total production of clean electricity (GWh)
11,400
2024
10,792
2022
11,161
2023
19
2024 Annual Report
COMMUNITIES
Local economic solutions to build healthy
communities
Innergex’s vision of a sustainable and prosperous future begins
with building trust and relationships with the communities that
host renewable energy projects. Innergex’s previous success
in working with local communities has proven that long-term
renewable energy projects help advance economic
diversification, promote workforce development, provide new
tax revenues to local governments, and often include other
forms of direct benefit sharing to both landowners and other
local stakeholder groups.
Indigenous communities in Canada have played a leadership role
in advancing the green energy transition. Innergex has a long
history of working side by side with Indigenous communities on
renewable energy projects, integrating lessons learned about
cultural preservation and environmental stewardship, while
catalyzing local economic growth and workforce development
opportunities. Innergex is proud of its history of promoting
economic reconciliation with Indigenous communities and will
continue to act as a model for developing long-term, mutually
beneficial relationships that promote sustainable economic
development and environmental responsibility.
Sponsorships and Donations
Our commitment to be a good neighbour and a responsible
corporate citizen supports the causes and efforts that have a
broader social impact. Our sponsorships and donations have,
and will continue, to positively impact communities. More than
ever, we remain committed to the values that have helped us
share the benefits renewable energy facilities generate.
A Path to Reconciliation
We believe that the private sector can play an important role
in reconciliation in alignment with the Truth and Reconciliation
Commission of Canada (TRCA) Call to Action #92. We are
grateful to have the opportunity to draw on the knowledge and
experience of Indigenous partners we work with to build a cleaner
and more prosperous shared future.
Innergex’s approach to social well-being
• Indigenous partnerships
• Sponsorship and Donation program
• Community social development funding
• Local community partnerships
• Legacy project funding
• Local contracting opportunities
• Contributing to local tax base
• Royalty agreements
• Community engagement
• Safeguard and Promotion of Human Rights policy
• Supplier Code of Conduct
• GRI alignment
Agreements currently signed
with Indigenous communities
31
2022
29
2023
40
2024
20
2024 Annual Report
GOVERNANCE
Informed climate-related solutions
for sustainable growth
The Innergex Board of Directors focuses on nurturing an
environment of strong ethics, responsible business practices,
and thorough risk oversight. The Board is responsible to review
and assess material risks associated with the Corporation’s
business which may adversely affect it, its activities, or its
financial condition or reputation, including climate-related risks.
It ensures Innergex has implemented systems to effectively
identify, manage, monitor, and mitigate any potential negative
impacts. The Board maintains the highest standards of good
governance and accountability to ensure that Innergex continues
to meet the expectations of our employees, partners, host
communities, as well as other stakeholders
Climate Risk Management
The Board of Directors is responsible to review and assess
material risks associated with the Corporation’s business,
which may adversely affect it, its activities, its financial condition
or reputation including climate-related risks. It ensures the
Corporation has implemented systems to effectively identify,
manage, and monitor the principal risks and to mitigate or reduce
their potential negative impacts. It receives updates on specific
risks and risk mitigation activities from management and each
of the relevant committees. The CEO regularly discusses
climate-related issues with the Board of Directors at quarterly
Board meetings.
Human Rights
Upholding human rights in all our business activities is
a fundamental principle at Innergex. Our commitment to
upholding human rights, including labour rights, is outlined in
our Safeguard and Promotion of Human Rights policy, Code
of Conduct, Supplier Code of Conduct policy, and Sustainable
Development policy.
These policies cover each employee and director of Innergex,
as well as third parties acting for, or on its behalf (consultants,
contractors, suppliers, agents, sponsors, joint venture partners
and advisors).
Innergex’s approach to corporate governance
• ESG/Climate oversight
• Board and committee succession planning
• CEO Succession planning
• Board member recruitment and onboarding process
• Share ownership guidelines for Board members and executives
• Yearly Board training
• Anti-Corruption and Anti-Bribery policy
• Board Diversity policy
• Code of Conduct and Ethicsline
• Information Disclosure policy
• Insider Trading policy
• Majority Vote policy
• Safeguard and Promotion of Human Rights policy
• Say on Pay policy
• Shareholder Engagement policy
• Whistle-Blowing policy
Combined attendance
at board and committee
meetings in 2024
100%
40%
of Board members were
women as at December 31,
2024, including Board Chair
21
2024 Annual Report
Our 2025
Corporate Priorities
As we advance our
2020–2025 Strategic
Plan, Innergex remains
committed to driving the
energy transition and
advancing our mission
while creating sustainable
value for all stakeholders.
Since 2020, we have been
focused on:
Tap into growth
markets
We intend to selectively participate in
request for proposals processes across
Canada and to select opportunities in the
United States, France and Chile in order to
secure winning, accretive projects in
various regions.
The Canadian market offers a great deal
of short and long-term renewable energy
project development opportunities that
we intend to seize to maintain or improve
our leadership position in the country. In
the United States, our team will maintain
its focus on projects with high potential
for success. In France, we will continue
to focus our development efforts in wind
and solar energy facilities which provides
attractive returns. We also intend to
pursue diversifying and growing our
activities in Chile where our portfolio
approach allows us to secure very
beneficial power agreements.
Maximize portfolio
potential
We will continue to identify and secure
strong growth options in all our markets,
adding further optionality for future
growth. Our experienced team of
developers will work with landowners,
local communities and Indigenous
communities to secure the necessary
requirements to pursue our growth and
continue delivering highly accretive
projects to be proposed in power calls
or to corporations desiring to meet their
electricity needs.
We intend to continue managing our
portfolio of prospective opportunities
to retain the most achievable and
profitable options in all of our four core
markets, and to continue prioritizing
winning renewable energy projects in our
future capital allocation.
• Growing Responsibly
Focus growth on current markets by
expanding our renewable energy and
storage portfolio while maintaining a
responsible and sustainable approach.
• Building Expertise
Develop deep expertise in energy storage
technologies to enhance our portfolio and
drive the future of clean energy.
• Optimizing Operations
Leverage our knowledge and innovation to
maximize the efficiency and performance
of our high-quality assets.
• Diversifying Activities
Increase the diversification of our
activities and assets to unlock new
opportunities and strengthen our
market position.
More recently, in 2024, we have increased
investments in our development activities,
as evidenced by the significant success in
multiple requests for proposals within our
core markets. We have now set ambitious
goals for 2025, including several key
priorities to continue executing on our
strategy, deliver value-added projects, and
further strengthen our financial flexibility
to seize the numerous highly accretive
growth opportunities in our core markets.
22
2024 Annual Report
Capitalize on development
momentum
In recent years, Innergex has won multiple
projects that are now rapidly evolving in
their development towards construction
and commercial operation. We will
maintain our focus on delivering these
projects within expectations.
Strengthen
financial flexibility
We will continue to actively manage our
portfolio to strengthen our financial
flexibility and support our growth
ambitions, and could potentially execute
on financings, refinancings, and capital
recycling initiatives. Innergex’s approach
to portfolio management is generally
guided by the principles of value creation,
risk management, and funding. We also
remain committed to maintaining an
investment-grade balance sheet and to
managing our liquidity to support our
growth strategy.
Reduce risks to
maximize performance
We remain committed to mitigating
adverse externalities on our operating
facilities to ensure optimal performance
and reliability. By proactively addressing
environmental, regulatory, and operational
challenges, we aim to maintain the highest
production levels while upholding our
commitment to sustainability and
responsible resource management.
Drive construction
forward while staying
on schedule and
within budget
We will focus our efforts on successfully
bringing our projects under construction
to commercial operation on schedule and
on budget. We will ensure to meet
pre-identified milestones as agreed as
part of our power purchase agreements
while collaborating with Indigenous
communities and all stakeholders
to maintain social acceptability
and continue to make a positive
contribution in communities.
23
2024 Annual Report
Portfolio
of Assets
Innergex owns
interests in four
groups of projects
at various stages:
Operating Facilities,
Construction Projets,
Development Projects
and Prospective
Projects.
Operating
facilities
90
As at February 20, 2025, Innergex owns
and operates 90 facilities in commercial
operation (the “Operating Facilities”).
Commissioned between 1986 and 2024,
the facilities have a weighted average
age of approximately 10.6 years.
They mostly sell the generated power
under long-term power purchase
agreements, and short- and long-term
industrial contracts (each, a “PPA”)
to rated public utilities or other
creditworthy counterparties, or on
the merchant market. The PPAs have
a weighted average remaining life of
13.0 years (weighted average based on
gross long-term average production).
For most Operating Facilities in Canada
and in France, PPAs include a base price
and, in some cases, a price adjustment
depending on the month, day and hour
of delivery, as well as adjustments based
on the consumer price index to mitigate
inflation risk. For most Operating
facilities in the United States, power
generated is sold through PPAs or on
the open market. In Chile, Operating
Facilities sell the power generated
through PPAs to power distribution
companies and industrial customers, or
on the open market. Please refer to the
“Business Environment - Inflation”
section of this MD&A for a discussion
regarding inflation.
The Corporation also holds interests
in projects under development that
are either at an advanced development
stage or under construction (the
“Development Projects”).
24
2024 Annual Report
The table below outlines Operating Facilities, Construction
Projects and Development Projects as at February 20, 2025.
1. The number of Operating Facilities includes all facilities owned and operated by the Corporation, including non-wholly owned subsidiaries and joint ventures
and associates.
2. Gross installed capacity is the total capacity of all Operating Facilities of Innergex, including non-wholly owned subsidiaries and joint ventures and associates.
3. Net installed capacity is the proportional share of the total capacity attributable to Innergex based on its ownership interest in each facility.
4. Capacity related to the hot water storage of the Pampa Elvira thermal solar facility (150 MWh storage capacity), San Andrés battery energy storage capacity of
35 MW/175 MWh (5 hours) & Salvador battery energy storage capacity of 50 MW/250 MWh (5 hours).
5. Battery storage capacity related to Hale Kuawehi of 30 MW/120 MWh (4 hours).
6. Battery storage capacity related to Salvador II of 20 MW/100 MWh (5 hours) and Battery storage capacity related to San Andrés II of 42 MW/210 MWh (5 hours).
Number of
Facilities1
Gross2 Installed
Capacity (MW)
Net3 Installed
Capacity (MW)
Operating
Facilities
Construction
and
Development
Projects
Operating
Facilities
Construction
and
Development
Projects
Operating
Facilities
Construction
and
Development
Projects
HYDRO
Canada
34
-
1,028
-
717
-
United States
3
-
70
-
40
-
Chili
5
2
173
112
169
85
Subtotal
42
2
1,271
112
926
85
WIND
Canada
8
6
908
1 062
714
490
France
16
5
324
81
227
48
United States
9
-
1,044
-
853
-
Chili
3
-
332
-
332
-
Subtotal
36
11
2,608
1,143
2,126
538
SOLAR
Canada
4
-
87
-
87
-
United States
2
2
450
230
325
230
Chile
3
-
1534
-
1534
-
Subtotal
9
2
690
230
565
230
STORAGE
United States
-
-
-
305
-
305
France
1
-
9
-
6
-
Chile
2
2
854
626
854
626
Subtotal
3
2
94
92
91
92
TOTAL
90
17
4,663
1,577
3,708
945
25
2024 Annual Report
The Corporation shares ownership of some Operating Facilities,
Development Projects and Prospective Projects with corporate,
financial, local community or Indigenous partners. Some
Operating Facilities have material non-controlling interests and
are treated as non-wholly owned subsidiaries. These facilities’
results are included in the Corporation’s consolidated results.
Non-Wholly Owned Subsidiaries
Operating
Facilities
Gross
Installed
Capacity
(MW)
Net
Installed
Capacity
(MW)
Sources
of Energy
Principal
Place of
Operation
Proportion of
Ownership Interest
and Voting Rights
Held by the
Corporation
Mesgi'g Ugju's'n (MU)
Wind Farm L.P.
Mesgi'g
Ugju's'n
150
75
Wind
Quebec
50.00%1,2,3
Harrison Hydro Limited
Partnership and its
subsidiaries
Douglas Creek,
Fire Creek, Lamont
Creek, Stokke Creek,
Tipella Creek and
Upper Stave River
150
75
Hydro
British
Columbia
50.01 %
Kwoiek Creek Resources
Limited Partnership
Kwoiek Creek
50
25
Hydro
British
Columbia
50.00%1,3
Innergex HQI USA LLC,
and its subsidiaries
Curtis Mills,
Palmer Falls
60
30
Hydro
New York
50.00%3
Innergex Sainte-Margue
rite S.E.C
Sainte-Marguerite
31
15
Hydro
Quebec
50.01 %
Cayoose Creek Power
Limited Partmership
Walden North
16
8
Hydro
British
Columbia
49.00%
Energía Coyanco S.A.
Guayacán
12
8.3
Hydro
Chile
69.47%
Innergex France S.A.S.
and its subsidiaries
17 facilities
324
227
Wind and
storage
France
70.00%
Phoebe JV Energy, LLC
Phoebe
250
125.25
Solar
Texas
50.10%
Griffin JV Energy, LLC
Griffin Trail
225.6
113.03
Wind
Texas
50.10%
Foard JV Energy, LLC
Foard City
350.3
272.53
Wind
Texas
77.80%
1 The Corporation owns more than a 50% economic interest in the entity.
2 The Corporation owns a 50% voting interest and a participation interest of 60.1% in 2024 (participation interest to decline over the years).
3 Based on the terms of agreements under which these entities were established, the Corporation is exposed to, and has right to, variable returns from its involvement
with the investee, and has the current ability to direct these entities’s activities that most significantly affect the returns.
26
2024 Annual Report
Some Operating Facilities are treated as joint ventures and
associates and accounted for using the equity method.
Innergex’s share of Production, Revenues and Adjusted EBITDA
of the joint ventures and associates are included in the
Corporation’s proportionate measures.
Joint Ventures and Associates
Operating
Facilities
Gross
Installed
Capacity
(MW)
Net
Installed
Capacity
(MW)
Sources
of Energy
Principal
Place of
Operation
Proportion of
Ownership Interest
and Voting Rights
Held by the
Corporation
Toba Montrose General
Partnership
East Toba and
Montrose Creek
235
94
Hydro
British
Columbia
40.00%1
Dokie General
Partnership
Dokie
144
37
Wind
British
Columbia
25.50%
Jimmie Creek Limited
Partnership
Jimmie Creek
62
32
Hydro
British
Columbia
50.99%2
Parc éolien
communautaire
Viger-Denonville, S.E.C.
Viger-Denonville
25
12
Wind
Quebec
50.00%
Umbata Falls L.P.
Umbata Falls
23
11
Hydro
Ontario
49.00%
Innavik Hydro Limited
Partnership
Innavik
8
4
Hydro
Quebec
50.00%
1 The Corporation holds a 51% voting interest and 40% participating economic interest. In 2046, the Corporation’s economic interest will increase to 51% for no additional consideration.
2 The Corporation does not consolidate the entity as it does not have control over the decision-making process.
27
2024 Annual Report
Management’s
Discussion
and Analysis
MANAGEMENT'S DISCUSSION AND ANALYSIS
This Management's Discussion and Analysis (“MD&A”) is a discussion of the operating results, cash flows and financial
position of Innergex Renewable Energy Inc. (“Innergex” or the “Corporation”) for the three months and year ended
December 31, 2024, and reflects all material events up to February 20, 2025, the date on which this MD&A was approved by
the Corporation's Board of Directors.
The MD&A should be read in conjunction with the audited consolidated financial statements and the accompanying notes for
the year ended December 31, 2024.
The audited consolidated financial statements attached to this MD&A and the accompanying notes for the year ended
December 31, 2024, along with the 2023 comparative figures, have been prepared in accordance with IFRS Accounting
Standards ("IFRS") as issued by the International Accounting Standards Board (IASB). However, some measures referred to in
this MD&A are not recognized measures under IFRS and therefore may not be comparable to those presented by other
issuers. Please refer to the “Non-IFRS Measures” section for more information.
All tabular dollar amounts are in thousands of Canadian dollars, except amounts per share or unless otherwise indicated.
Some amounts included in this MD&A have been rounded to make reading easier, which may affect some calculations.
To inform readers of the Corporation's future prospects, this MD&A contains forward-looking information within the meaning of
applicable securities laws (“Forward-Looking Information”). Please refer to the “Forward-Looking Information” section for more
information.
Additional information relating to Innergex, including its Annual Information Form, can be found on the Canadian Securities
Administrators' System for Electronic Document Analysis and Retrieval (“SEDAR+”) at sedarplus.ca or on the Corporation's
website at innergex.com. Information contained in or otherwise accessible through our website does not form part of this
MD&A and is not incorporated into the MD&A by reference.
TABLE OF CONTENTS
1- Highlights .........................................................................
30
Financial Year 2024 ....................................................
30
Financial Year 2024 - Selected Information ............
32
Financial Year 2024 - Operating Performance .......
33
Financial Year 2024 - Capital and Resources ........
34
Subsequent Events .....................................................
34
Financial Year 2023 ....................................................
35
2- Overview of Operations .................................................
37
Business Environment ................................................
37
Prospective Projects ...................................................
40
Development Activities ...............................................
41
Construction Activities ................................................
42
Commissioning Activities ............................................
43
Operating Facilities .....................................................
44
3- Financial Performance and Operating Results ..........
45
Hydroelectric Segment ...............................................
46
Wind Segment .............................................................
47
Solar and Storage Segment ......................................
48
Net Earnings (Loss) ....................................................
49
Adjusted Net (Loss) Earnings ....................................
50
Non-Controlling Interests ...........................................
51
4- Capital and Liquidity ......................................................
52
Capital Structure ........................................................
52
Financial Position .......................................................
53
Cash Flows .................................................................
55
Free Cash Flow and Payout Ratio ..........................
57
Information on Capital Stock ....................................
59
Dividends .....................................................................
60
5- Outlook ............................................................................
61
2024 Guidance Achievements .................................
61
2025 Growth Targets .................................................
61
6- Non-IFRS Measures .....................................................
62
7- Additional Consolidated Information ...........................
67
Geographic Segments- Revenues ..........................
67
Geographic Segments- Non-current Assets ..........
67
Historical Quarterly Financial Information ..............
67
8- Accounting Policies and Internal Controls .................
69
Material Accounting Policies ....................................
69
Internal Controls .........................................................
70
9- Risk and Uncertainties ..................................................
71
10- Forward-Looking Information ....................................
82
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p29
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
1- HIGHLIGHTS | Financial Year 2024
On January 26, 2024, the Innu Council of Pessamit, Innergex and the Regional County Municipality of Manicouagan ("RCM of
Manicouagan") announced that their 300 MW Manicouagan wind project has been selected in Hydro-Québec's request for
proposals. Commercial operation is scheduled for 2029, and the power purchase agreement with Hydro-Québec (S&P credit
rating: AA-) was signed on May 17, 2024 and is structured as a 30-year take-or-pay contract, indexed to a predefined
percentage of the Consumer Price Index (“CPI”), ensuring financial stability and protection against inflation.
On January 26, 2024, Innergex, the Regional County Municipality of Lotbinière ("RCM of Lotbinière") and the Abenaki Councils
of Odanak and Wôlinak announced that their 100 MW Lotbinière Ndakina wind project has been selected in Hydro-Québec's
request for proposals. Commercial operation is scheduled for late 2028, and the power purchase agreement with Hydro-
Québec (S&P credit rating: AA-) was signed on April 15, 2024, and is structured as a 30-year take-or-pay contract, indexed to
a predefined percentage of the CPI, ensuring financial stability and protection against inflation.
On February 21, 2024, Innergex announced that its Board of Directors approved an update to its capital allocation strategy,
specifically as it pertains to its dividend to support its long-term growth objectives. The change started with the dividend
payment on April 15, 2024, to shareholders of record on March 28, 2024. The updated capital allocation strategy, which
recalibrates the dividend and introduces a new payout ratio target range, will prioritize a self-funded model, increase financial
flexibility and allow for additional growth investments in greenfield projects. With its new dividend payout ratio target range of
30% to 50% of Free Cash Flow1 and its revised annual dividend for 2024 of $0.36 per common share, Innergex expects to free
up approximately $75 million annually to support its growth ambitions.
On March 1, 2024, Innergex was awarded 350 GWh per year in Codelco's latest request for proposals in Chile. Under the
terms of the agreement, Innergex will supply Codelco (S&P: BBB+) with clean energy produced by its portfolio of assets from
2026 to 2040.
On March 21, 2024, Innergex provided an update on its Dividend Reinvestment Plan (the "Plan"), under which the Corporation
has the discretion to either purchase the additional common shares on the open market or issue them from treasury. The
Corporation indicated that for the April 15, 2024, dividend and for future dividends declared until further notice, the Corporation
will purchase common shares on the secondary market at the average price (excluding any brokerage commissions, fees and
service charges) per common share paid by the agent for all common shares acquired in respect of an investment period
being the Market Purchase Price (as defined in the Plan).
On May 21, 2024, Innergex announced that its 35 MW/175 MWh (5 hours) San Andrés battery energy storage facility has
begun operations and was injecting energy to the grid. Located on the site of Innergex’s existing San Andrés solar facility in
Northern Chile it is Innergex’s second largest energy storage facility currently in operation and was completed below budget.
On June 20, 2024, Innergex closed a partnership agreement for the sale of minority interests in its 826 MW portfolio of
renewable energy facilities in Texas, for a total equity consideration of US$185.7 million ($253.8 million), including customary
working capital adjustments (the "Texas Portfolio Transaction"). Net proceeds from the transaction were used primarily to
repay the existing Foard City and Phoebe project debts and the power hedge offtake contract in place at Phoebe, with the
remainder to be used for general corporate purposes. This new structure, which departs from the power hedge offtake model,
will enable Innergex to improve its overall risk profile and optimize the performance of the Texas assets.
On August 5, 2024, the PPA for the three Portneuf hydro facilities, which reached the end of its initial term in May 2021, was
renewed for a 25-year period ending in 2046 and will be indexed to 100% of the Consumer Price Index. This renewal
supported the financing, on November 4, 2024, of these unlevered assets.
On September 13, 2024, the Corporation acquired a 2.7 MW run-of-river hydro facility in Chile, La Confianza, which
complements the Mampil and Peuchén (Duqueco) hydro facilities' production, as the new facility is located on the same
watershed. The transaction was completed for a nominal amount.
On November 4, 2024, the Corporation closed a $107.5 million non-recourse project financing at an effective interest rate of
5.61% with The Canada Life Assurance Company, to finance the 27.7 MW Portneuf hydroelectric portfolio comprising three
operating facilities. The term loans are scheduled to be amortized through 2040 and 2043, with a $50.0 million payment at
maturity, aligning well with the duration of the facilities' power purchase agreements, which extend to 2046. The proceeds will
be used mainly to repay the corporate revolving credit facility, effectively reducing corporate leverage.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p30
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
On December 9, 2024, Innergex announced that three of its wind projects, Stewart Creek Wind, Nithi Mountain Wind and K2
Wind, co-developed with Indigenous partners, have been selected in BC Hydro's most recent Request for Proposals (RFP) for
new renewable energy generation. Representing a combined gross capacity of 560 MW, this achievement highlights
Innergex's leadership in Canada and in British Columbia, and its expertise in developing renewable energy projects in
partnership with Indigenous communities that bring significant economic and environmental benefits to local communities.
PPAs were signed on December 27, 2024 with BC Hydro for all 3 projects.
On December 16, 2024, Innergex announced that it closed a US$100 million (CAN$142 million) bridge loan with First Citizens
Bank to support the Hale Kuawehi project through its final stages and repay the corporate revolving credit facility, effectively
reducing corporate leverage.
On December 17, 2024, Innergex announced that it closed two non-recourse financing agreements totalling $199.0 million to
optimize the financial structure of its renewable energy assets and support future development activities. The first is a
$133.7 million non-recourse project financing with The Canada Life Assurance Company ("Canada Life") for the 50 MW Ashlu
Creek hydro facility. The second is a $65.3 million non-recourse back leverage financing with National Bank of Canada and
SLC Management for the 150 MW Mesgi'g Ugju's'n wind farm.
In 2024, Innergex successfully delivered on its corporate priorities, demonstrating its ability to execute on its commitments. It
also met its 2024 financial guidance for Adjusted EBITDA Proportionate1 while exceeding its guidance for Free Cash Flow1 per
share. These achievements reinforce the Corporation's commitment to its disciplined, self-funded growth strategy and
towards its future growth and continued success.
1 These measures are not recognized measures under IFRS and therefore may not be comparable to those presented by other issuers. Please refer to the
Section 6- NON-IFRS MEASURES of this MD&A for more information.
1- HIGHLIGHTS | Financial Year 2024 – Selected Information
Year ended December 31
2024
2023
2022
OPERATING RESULTS
Production (MWh)
10,884,988
10,621,478
10,254,005
Revenues and Production Tax Credits
1,047,177
1,041,574
935,223
Operating Income
273,527
219,575
263,366
Adjusted EBITDA1
709,701
687,743
612,165
Net Earnings (Loss)
26,487
(105,814)
(91,115)
Adjusted Net Earnings (Loss)1
55,969
(2,052)
(32,503)
PROPORTIONATE
Production Proportionate (MWh)
11,399,583
11,160,580
10,792,047
Revenues and Production Tax Credits Proportionate1
1,113,612
1,102,655
995,758
Adjusted EBITDA Proportionate1
760,593
735,261
658,883
COMMON SHARES
Dividends declared on Common Shares
73,219
147,058
146,957
Dividends declared on Series A Preferred Shares
2,757
2,757
2,757
Dividends declared on Series C Preferred Shares
2,875
2,875
2,875
Weighted Average Number of Common Shares (in 000s)
202,446
203,565
201,836
Year ended December 31
2024
2023
2022
CASH FLOW AND FREE CASH FLOW
Cash Flow From Operating Activities2
292,165
297,853
430,243
Free Cash Flow1,2
213,941
214,930
171,988
Free Cash Flow per Share1,2
1.06
1.06
0.85
Payout Ratio1,2
34 %
68 %
85 %
As at
FINANCIAL POSITION
December 31,
2024
December 31,
2023
December 31,
2022
Total Assets
9,441,300
8,939,826
8,602,427
Total Liabilities
7,922,628
7,734,498
7,116,000
Equity Attributable to Owners
1,125,638
1,086,883
1,316,195
Non-Controlling Interests
393,034
118,445
170,232
1.
These measures are not recognized measures under IFRS and therefore may not be comparable to those presented by other issuers. Please refer to
Section 6- NON-IFRS MEASURES of this MD&A for more information.
2.
For more information on the calculation and explanation, please refer to Section 4- CAPITAL AND LIQUIDITY | Free Cash Flow and Payout Ratio of this
MD&A.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p32
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
1- HIGHLIGHTS | Financial Year 2024 – Operating Performance
In 2024, the Corporation closed a partnership agreement for the sale of minority interests in its 826 MW portfolio of renewable
energy facilities in Texas, for a total equity consideration of US$185.7 million ($253.8 million), including customary working
capital adjustments. Innergex was also awarded 350 GWh per year from 2026 to 2040 in Codelco's latest request for
proposals in Chile. The Corporation renewed the PPA for the three Portneuf hydro facilities, acquired the La Confianza 2.7 MW
run-of-river hydro facility in Chile and closed two non-recourse financing agreements totalling $199.0 million for the 50 MW
Ashlu Creek hydro facility and for the 150 MW Mesgi'g Ugju's'n wind farm. The Innavik hydro facility and the Boswell Springs
wind facility reached commercial operation during the year, and construction of the Hale Kuawehi solar and battery project is
nearly complete. The Corporation was awarded a total of 5 new wind energy projects with an installed capacity of 960 MW, the
100 MW Lotbinière Ndakina and the 300 MW Peshu Napeu in Quebec, and the 200 MW Nithi Mountain Wind, 200 MW
Stewart Creek Wind and 160 MW K2 Wind projects in British Columbia, for which PPAs were all signed in 2024.
For the year ended December 31, 2024, Revenues and Production Tax Credits were up 1% to $1,047.2 million compared
with the same period last year. The increase is mainly explained by higher production at the hydro facilities in British Columbia
and at the wind facilities in Quebec, higher prices at the wind facilities in Chile, the commissioning of the Salvador and San
Andrés battery storage facilities in October 2023 and in May 2024, respectively, and a one-time recognition of $16.2 million of
production tax credits from previous years in the United States arising from a change in recoverability estimates. The increase
is partly offset by lower prices at the Phoebe, Griffin Trail and Foard City facilities in the United States, lower production at the
wind facilities in France and Chile and at the hydro facilities in Quebec and at the Curtis Palmer hydro facilities in the United
States. Revenues and Production Tax Credits Proportionate1 were up 1% at $1,113.6 million compared with the same period
last year.
For the year ended December 31, 2024, Operating, general, administrative and prospective projects expenses were up
4% to $340.8 million compared with the same period last year. The higher expenses are mainly explained by higher
prospective expenses in all regions.
The increase in realized gain on the power hedges is mainly related to the decrease in merchant prices for the Phoebe power
hedge until its termination in June 2024.
As a result of the factors explained above, Adjusted EBITDA1 was 3% higher at $709.7 million for the year ended
December 31, 2024, and Adjusted EBITDA Proportionate1 was 3% higher at $760.6 million, compared with the same period
last year.
Innergex recorded net earnings of $26.5 million ($0.05 net earnings per share - basic and diluted) for the year ended
December 31, 2024, compared with net loss of $105.8 million ($0.51 net loss per share - basic and diluted) for the
corresponding period in 2023. In addition to the aforementioned operating performance, the increase in net earnings is mainly
explained by the decrease in impairment of long-term assets attributable to the $44.6 million impairment charges recognized
on the Aela facilities compared with the $118.9 million impairment charges recognized on the Hale Kuawehi and Hillcrest
facilities in 2023, the favourable Phoebe power hedge settlements in 2024 compared with the corresponding period in 2023,
and by the unfavourable change in 2023 related to the fair value of the contingent considerations provision.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p33
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
1 These measures are not recognized measures under IFRS and therefore may not be comparable to those presented by other issuers. Please refer to the
Section 6- NON-IFRS MEASURES of this MD&A for more information.
1- HIGHLIGHTS | Financial Year 2024 – Capital and Resources
The increase in total assets compared with December 31, 2023, results largely from the construction activities at the Hale
Kuawehi solar and battery energy storage project, the Boswell Springs wind project and the San Andrés battery energy
storage project. The appreciation of the U.S. dollar also contributed to the increase in total assets. These items were partly
offset by depreciation and amortization and by a $44.6 million impairment charge recognized on the Aela facilities.
The increase in total liabilities compared with December 31, 2023, results largely from the net draws made toward the
construction of the Boswell Springs wind, the Hale Kuawehi solar and battery energy storage and the San Andrés battery
energy storage projects, and by the appreciation of the U.S. dollar. These items were partly offset by the repayments of the
Phoebe and Foard City project debts, concurrent with the Texas Portfolio Transaction, and the scheduled principal repayments
of long-term loans and borrowings.
The increase in shareholders' equity compared with December 31, 2023, results largely from the Texas Portfolio Transaction
and the total comprehensive income, partly offset by the dividends declared on common and preferred shares, and the
distributions to non-controlling interests.
The decrease in cash flows from operating activities before changes in non-cash operating working capital items, for the year
ended December 31, 2024, is mainly due to the settlement of the derivative financial instruments concurrent with the Texas
Portfolio Transaction.
Excluding this transaction, cash flows from operating activities before changes in non-cash operating working capital items
increased from the comparative period, mainly derived from the precommissioning energy generation at the Boswell Springs
facility, the commissioning of the Salvador and San Andrés battery energy storage facilities, and the one-time recognition of
$16.2 million of production tax credits from previous years in the United States arising from a change in recoverability
estimates. The decrease in Free Cash Flow1 for the year ended December 31, 2024 is mainly explained by the decrease in the
gains realized on strategic transactions relating to the French portfolio during Q4 2023 compared to the Texas Portfolio
Transaction during Q2 2024, partly offset by the above factors.
1- HIGHLIGHTS | Subsequent Events
Acquisition of the La Cense wind development project in France
On January 28, 2025, Innergex announced the addition of the 13 MW La Cense wind project to its development portfolio,
through Innergex France. Located in the Oise department in France, this initiative marks Innergex France’s first development
acquisition since the minority sale of its shares in October 2023 to Crédit Agricole Assurances and Crédit Agricole Centre-Est.
The project in development has already advanced to construction and is expected to reach commercial operation in 2026.
Subordinated Unsecured Term Loan
On February 3, 2025, upon reaching maturity, Innergex repaid the $150.0 million subordinated unsecured term loan with funds
from the revolving term credit facility.
Boswell Springs Term Conversion and Tax Equity Funding
On February 18, 2025, the US$237.0 million ($335.7 million) construction loan was converted into a US$203.3 million
($287.9 million) backleverage term loan carrying an interest rate of 6-month SOFR +1.38% (approximately 5.00% fixed
through an interest rate swap), amortizing over 28 years, with an initial 10-year maturity. Innergex contributed an additional
US$62.8 million ($89.0 million) in sponsor equity.
Concurrently, the US$322.7 million ($457.1 million) tax equity bridge loan was reimbursed with the proceeds from the tax
equity investors' contribution in return for its Class A membership interest, totalling US$338.3 million (479.2 million).
The excess contribution of the tax and sponsor equity funding, including the backleverage term loan, will be used to fund the
remaining construction-related spending, such as the construction holdbacks, and completion reserve.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p34
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
1 These measures are not recognized measures under IFRS and therefore may not be comparable to those presented by other issuers. Please refer to the
Section 6- NON-IFRS MEASURES of this MD&A for more information.
Tax equity financing details
The interest in the Class A shares is accounted for as a debt instrument by the Corporation. The Corporation anticipates the
Flip Point date of the Boswell Springs tax equity financing to occur in 2034, upon achieving after-tax returns of 8.00%.
The tax equity investors' share of taxable income (losses), PTCs and cash distributions are detailed in the table below. After
the Flip Point, the Boswell Springs tax equity investors will retain a 5.1% financial interest in the project which will be
accounted for as non-controlling interests.
Tax Equity Investor
Taxable income (losses) and PTCs
99.0 %
Cash distributions
15.0 %
Tariffs Imposed by the United States of America
On February 1, 2025, the President of the United States of America issued three executive orders directing the United States
to impose new tariffs on imports originating from Canada, Mexico and China. These orders call for additional 25% duty on
imports into the United States of Canadian-origin and Mexican-origin products and 10% duty on Chinese origin products,
except for Canadian energy resources that are subject to an additional 10% duty.
The Corporation is assessing the direct and indirect impacts to its business of such tariffs, retaliatory tariffs or other trade
protectionist measures implemented as this situation develops. However, Innergex does not import or export the energy it
produces. As such, Management anticipates that the forecasted impacts on its operating activities will be limited.
1- HIGHLIGHTS | Financial Year 2023
For the year ended December 31, 2023, Revenues and Production Tax Credits were up 11% to $1,041.6 million compared with
the same period in the previous year. The increase was mainly explained by the Aela and Sault Ste. Marie acquisitions, and by
the operating performance of the production facilities. Revenues and Production Tax Credits Proportionate1 were up 11% at
$1,102.7 million compared with the same period in the previous year. As a result, Adjusted EBITDA1 was up 12% to
$687.7 million for the year ended December 31, 2023, and Adjusted EBITDA Proportionate1 was up 12% higher to
$735.3 million, compared with the same period in the previous year.
The increase in net loss compared to 2022 is largely explained by the impairment charges recognized on the Hale Kuawehi
and Hillcrest facilities, an unfavourable change in fair value of the contingent considerations provision, an increase in finance
costs mainly related to the refinancing of the non-recourse debt in Chile in Q3 2022 following the Aela Acquisition, and an
increase in depreciation and amortization mainly attributable to the Aela and Sault Ste. Marie acquisitions. These items were
partly offset by a favourable shift in the merchant power curves for the Phoebe power hedge and an increase in income tax
recovery.
The increase in total assets results largely from the Sault Ste. Marie Acquisition, the construction activities on Hale Kuawehi,
Boswell Springs, and Salvador and San Andrés battery energy storage projects, partly offset by the sale of the safe harbor
solar modules in 2023, and by the disposition of the Kokomo and Spartan solar facilities.
The increase in total liabilities results largely from the net draws made toward the construction of the Boswell Springs,
Salvador and San Andrés battery energy storage projects and the Hale Kuawehi solar project, and the Sault Ste. Marie
Acquisition and the increase in fair value of the contingent considerations provision.
The decrease in shareholders' equity results largely from the dividends declared on common and preferred shares, the total
comprehensive loss, and the distributions to non-controlling interests, partly offset by the proceeds from the disposition of a
non-controlling interest in Innergex's portfolio in France.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p35
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
1 These measures are not recognized measures under IFRS and therefore may not be comparable to those presented by other issuers. Please refer to the
Section 6- NON-IFRS MEASURES of this MD&A for more information.
The decrease in cash flows from operating activities before changes in non-cash operating working capital items is mainly due
the realized gain on the settlement, in 2022, of the interest rate swaps as part of Innergex's Chilean refinancing, and the
foreign exchange forward contracts concurrent with the French Acquisition, as well as by the increase in finance costs paid,
stemming mainly from the Chile Green Bonds and the Sault Ste. Marie Acquisition. Free Cash Flow1 was favourably impacted
by a gain realized upon disposition of a 30% non-controlling interest in the French portfolio, and by the Aela and Sault Ste.
Marie acquisitions. The increase was partly offset by an increase in principal and interest payments stemming from the
acquisitions and construction activities.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p36
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
2- OVERVIEW OF OPERATIONS | Business Environment
Key Growth Factors
Innergex's future growth will be subject to the following key factors:
•
the growing demand for renewable energy, as key to the energy transition to fight climate change, as supported by
international agreements such as the Paris Agreement;
•
government policies for climate change mitigation and adaptation and for the procurement of new renewable energy
capacity;
•
the availability of long-term renewable energy purchase contracts with highly creditworthy counterparties;
•
the implementation of non-discriminatory access to transmission systems, providing independent power producers
with access to regional electricity markets;
•
ability to sell power on a merchant basis in its core markets;
•
its capacity to evaluate and secure attractive prospective sites for the development of new projects;
•
its ability to secure strong partnerships and work together with Indigenous and local communities;
•
its ability to adequately forecast total construction costs, expected revenues and expected expenses for each project;
•
its ability to adapt to rapidly evolving market dynamics;
•
its ability to finance its growth, including access to diverse funding sources; and
•
its ability to provide power with the increasing market readiness and cost effectiveness of renewable energy and
storage technologies.
Key Geographic Markets
In Canada, growth opportunities for renewable power generation have emerged in response to growing demand, supported by
electrification and digitalization trends, in addition to commitments to reducing greenhouse gas (“GHG”) emissions; the
national price on carbon pollution; public concern over fossil fuel power generation, air quality, and improvements in renewable
energy technology and affordability. Renewable electricity generation in Canada is also supported by provincial procurements
that result in long-term contracts with crown corporations, incentives such as accelerated depreciation, investment tax credits
and legislated commitments to renewable energy generation. The Government of Canada has committed to reduce GHG
emissions by 40-45% from 2005 levels by 2030 and achieve net-zero emissions economy-wide by 2050. Specific
commitments in the electricity sector include phasing out coal-fired electricity generation by 2030 and achieving a net-zero
electricity grid by 2050, in relation to which regulations were finalized in 2024. While federal policies may shift following the
election scheduled to take place by October 2025, provincial commitments and strong demand for affordable low-carbon
electricity continues to drive provincial procurements. Canada’s electricity grid is more than 80% emissions-free. This is largely
due to hydroelectric resources which provide around 60% of annual power generation. Wind and solar power supplied
approximately 7% of Canadian electricity generation in 2022 and are the fastest-growing electricity sources in Canada.
In the United States, states and the federal government share responsibility for power generation. States retain jurisdiction
over siting of energy projects on private land and have established many policies, like clean energy standards, to support
renewables. Federal agencies ensure compliance with federal laws through agency permits on issues like aviation safety and
endangered species. The Federal Energy Regulatory Commission (FERC) regulates interstate wholesale electricity
transactions, typically by setting rules and standards for Regional Transmission Organizations (RTOs). Parties sell power
under various types of contracts, including long-term PPAs, power hedges, and commercial and retail contracts. The 2022
enactment of the Inflation Reduction Act ("IRA") directed significant federal funding to energy projects in the form of tax credits
designed to catalyze private investment in multiple aspects of the clean energy sector. Key members of Congress have stated
their strong support for clean energy provisions in the IRA. On January 20, 2025, the President of the United States of America
issued an executive memo to agencies which paused certain federal leasing and permitting approvals for wind and solar
projects, creating uncertainty for select projects. Many states maintain renewable portfolio standards (RPS) policies that
require electricity suppliers to source a certain amount of their electricity from renewable technologies. To date, over 30 U.S.
states have some form of renewable energy standard or goal in place, with 28 states plus the District of Columbia aiming for
100% clean electricity by 2050 or earlier. The combination of these policies, favourable costs for renewable electricity
generation, and corporate interests are expected to continue to create demand for new renewable generation capacity. Trends
in onshoring/re-shoring of manufacturing, electrification, and digitalization are expected to lead to a significant increase in
overall U.S. electricity demand growth. Some forecasts are calling for annual energy demand growth of 3% to 4% on average
through 2030 or 2035, which compares to limited growth in the past two decades and creates, in our view, a large-scale need
which renewable generation can help to meet.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p37
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
In France, the electricity system is largely deregulated for production, ancillary services and electricity supply. The
transmission system operator (RTE) and the distribution operator (ENEDIS), both subsidiaries of Électricité de France (EDF),
are responsible for managing distribution and transport infrastructure and have a duty to provide interconnection to renewable
energy projects at standardized conditions. Social acceptability continues to be the main constraint to renewable development
in France as evidenced by the number of claims filed against wind projects. Development time remains long for onshore wind
(7-8 years on average) and solar (4-5 years on average). The Corporation expects that the new decree specifying the
conditions to use agricultural lands for solar projects will help addressing this issue at least for solar projects. On the tax side,
France has watered down its special taxes on record profit to 50% of all revenues generated when the price of energy sold is
above 105€/MWh for 2024 (vs. 90% above 100€/MWh in 2023). In the absence of a vote on the budget by the relevant
authorities, it is unclear if this tax will be prolonged in 2025. The favourable policies and climate strategy, strong political will for
decarbonization and the trends in energy security and sovereignty, as well as the competitiveness of renewable power should
support, in our opinion, a positive environment for renewable energy developers in France.
In Chile, the market benefits from both recurring regulated tenders for long-term contracts and an active corporate PPA market
for power supply. There are significant opportunities to partner with corporations in the energy-intensive mining industry which
consumes about a third of Chile’s overall power production. In 2024, for the first time, the combined output from solar and wind
(35%) surpassed thermal generation (30%). Investments in energy storage also increased significantly, which is critical to
support the management of intermittent renewable energy, particularly in regions like Atacama and Antofagasta, which
dominate solar and wind capacity. Chile has set legislated commitments to renewable energy, which target increases in
renewable energy generation to 80% by 2030 and 100% by 2050. One of the most concrete actions to date has been the
Retirement Plan and/or Reconversion of Coal Units, which aims to remove remaining coal-fired power plants (which still
provide more than 15% of Chile’s electricity) by 2040. The strong regulatory support for clean power, combined with growing
power demand and a healthy corporate PPA market are expected to support, in our view, a favourable environment for
renewable energy in Chile. The 2024 achievements mark a significant shift in the nation’s energy mix and reinforce Chile’s
strong commitment to its energy transition goals.
Global Climate Change
Climate change, which increases the likelihood, frequency and severity of adverse weather conditions such as severe storms,
droughts and water stress, heat waves, forest fires, rising temperatures and changing precipitation patterns, presents both
risks and opportunities to the Corporation. Impacts from climate change could result in more frequent and severe disruptions to
the Corporation’s generation facilities and the power markets in which the Corporation operates.
The Corporation’s facilities are exposed to climate change hazards. The Corporation carefully manages physical risks,
including preparing for, and responding to, extreme weather events through activities such as proactive route selection, asset
hardening, regular maintenance, and insurance. The Corporation follows regulated engineering codes, evaluates ways to
create greater system reliability and resiliency and, where appropriate, submits regulatory applications for capital expenditures
aimed at creating greater system reliability and resiliency. When planning for capital investments or asset acquisitions, the
Corporation considers site-specific climate and weather factors, such as flood plain mapping and extreme weather history.
Prevention activities include wildfire management plans and vegetation management at electricity transmission and distribution
sites. The Corporation maintains comprehensive emergency response measures in the likelihood of extreme weather events.
Despite all the measures in place to prepare for and respond to extreme weather events, there is no assurance that these
events will not affect the Corporation’s revenues and profitability.
In 2022, the Corporation released its Task Force on Climate-related Financial Disclosures (“TCFD”) aligned Climate
Assessment Report, an important step in its sustainability journey and essential in identifying and addressing the climate risks
and opportunities for Innergex.
Through consultations with various levels of the Corporation, including the Board of Directors, the executive as well as experts
in each of the jurisdictions in which the Corporation operates, the team gained an understanding of the resilience of the
business in two different climate scenarios by performing assessments, on a facility-by-facility basis, of potential physical and
transitional impacts. The bulk of this work included high carbon and low carbon scenarios that has aided in informing business
strategy and financial planning processes and assess the resilience of its strategies. The report is available on
innergex.com/en/esg.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p38
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Seasonality of Operations
The Corporation aims to maintain a diversified portfolio of assets in terms of geography and sources of energy to alleviate any
seasonal and production variations. The amount of electricity generated by the Operating Facilities is generally dependent on
the availability of water flows, wind regimes and solar irradiance. Lower-than-expected resources in any given quarter could
have an impact on the Corporation's revenues and hence on its profitability.
Fortunately, the complementary nature of hydro, wind and solar energy production partially offsets any seasonal variations, as
illustrated in the following table:
Consolidated LTA and Quarterly Seasonality1
In GWh and %
Q1
Q2
Q3
Q4
Total
HYDRO
513
14 %
1,251
33 %
1,185
31 %
817
22 %
3,766
WIND
2,106
28 %
1,839
24 %
1,541
21 %
2,051
27 %
7,537
SOLAR
285
20 %
414
29 %
452
31 %
286
20 %
1,437
Total
2,904
23 %
3,504
27 %
3,178
26 %
3,154
24 %
12,740
1.
The consolidated long-term average production is the annualized LTA for the facilities in operation as at February 20, 2025. The LTA is presented in
accordance with revenue recognition accounting rules under IFRS and excludes production from facilities that are accounted for using the equity method.
Production in comparison to the LTA is a key performance indicator for the Corporation. For more information, please refer to the Key Figures section of this
MD&A.
Inflation
The Corporation's operating facilities have shown resiliency toward inflation as most of its long-term PPAs contain partial or full
indexation clauses that annually adjust for the effects of inflation. As such, inflation pressures on the Corporation's operating,
general and administrative expenses are generally absorbed by higher revenues.
Interest rate
The Corporation mitigates the interest rate risk related to its long-term loans and borrowings by entering into fixed-rate
financing agreements or interest rate swap agreements concurrently with entering into floating-rate loan facilities, typically with
matching notional and amortization periods. As at December 31, 2024, excluding the construction financing of the Boswell
Springs wind project, which is subject to a forward-starting interest rate swap, approximately 5.8% of the Corporation's total
long-term loans and borrowings were exposed to interest rate fluctuations. The Corporation's long-term loans and borrowings
have a weighted-average maturity of 11.2 years, therefore near-term fluctuations in interest rates have a limited effect on the
Corporation's future cash flows.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p39
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
2- OVERVIEW OF OPERATIONS | Prospective Projects
Innergex owns interests in numerous prospective projects at various stages of development. Some projects have secured land
rights, filed an investigative permit application or have submitted or could submit a proposal under a Request for Proposals
(collectively the “Prospective Projects”). The list of Prospective Projects is revised quarterly to add or remove projects,
according to their advancement potential. Prospective projects are categorized in different stages based on the items below.
There is no certainty that any Prospective Project will be realized.
In order to define the stage of each prospective project, their progression is measured according to their development maturity
leading to obtaining a final notice to proceed to the construction phase combined with a success probability factor that the
project will reach COD. Prospective projects are segregated into three different stages, i.e. early, mid and advanced.
Prospective projects can be submitted in requests for proposals at any stage of development, from early to advanced stages.
Early Stage
The prospective projects in this category have a LOW development maturity combined with an
UNDETERMINED success probability factor; or a MID-stage development maturity combined with an
UNDETERMINED success probability factor.
Mid Stage
The prospective projects in this category have a MID-stage development maturity combined with a
MEDIUM success probability factor; or a HIGH-stage development maturity combined with a MEDIUM
success probability factor.
Advanced Stage
The prospective projects in this category have a HIGH development maturity combined with a HIGH
success probability factor; or a MID-stage development maturity combined with HIGH success probability
factor.
Early Stage
Mid Stage
Advanced Stage
Total
Capacity1
(in MW)
Total
number of
projects
Capacity1
(in MW)
Number of
projects
Capacity1
(in MW)
Number of
projects
Capacity1
(in MW)
Number of
projects
CANADA
Hydro
497
15
—
—
—
—
497
15
Solar
480
6
—
—
—
—
480
6
Wind
4,405
22
1,143
6
—
—
5,548
28
Storage
—
—
100
2
—
—
100
2
Subtotal
5,382
43
1,243
8
—
—
6,625
51
UNITED STATES
Solar
560
5
289
3
415
2
1,264
10
Wind
600
2
400
1
—
—
1,000
3
Green hydrogen2
5
1
—
—
—
—
5
1
Storage
—
—
100
1
—
—
100
1
Subtotal
1,165
8
789
5
415
2
2,369
15
FRANCE
Solar
125
4
85
6
67
1
277
11
Wind
84
4
105
4
164
8
353
16
Storage
19
1
—
—
—
—
19
1
Subtotal
228
9
190
10
231
9
649
28
CHILE
Hydro
—
—
—
—
154
1
154
1
Solar
32
1
—
—
—
—
32
1
Wind
—
—
409
1
—
—
409
1
Storage
—
—
—
—
50
1
50
1
Subtotal
32
1
409
1
204
2
645
4
Total
6,807
61
2,631
24
850
13
10,288
98
Change from
Q3 2024
+1,723
+14
-1,233
-3
-9
-1
+481
+10
Change from Q4
2023
+1,880
+12
-975
+6
-688
-5
+217
+13
1.
Only Gross Installed Capacity is disclosed for Prospective Projects as the net capacity is not yet defined at this stage.
2.
In this table, the electrolyser was attributed to the United States until additional progress is achieved. The production is estimated at 800,000 kg per year,
which corresponds to approximately 5 MW based on current assumptions.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p40
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Compared to Q3 2024, in Canada ten new projects were added and three moved from prospective to development, for a net
decrease of 390 MW. In the United States, three new projects were added, for a net increase of 570 MW. In France, three
projects were added, for a net increase of 128 MW. In Chile, one project had a change in expected capacity, for a net increase
of 173 MW. In total, 481 MW of net prospective projects were added in the quarter due mainly to the addition of new projects.
2- OVERVIEW OF OPERATIONS | Development Activities
Innergex owns a portfolio of projects in the development stage with a gross installed capacity of approximately 1,337.0 MW.
The table below outlines their status as at the date of this MD&A.
Name
(Location)
Type
Ownership
(%)
Gross
installed
capacity
(MW)
PPA term
(years)
Expected
COD
Auxy Bois Régnier (France)
Wind
70 %
29.4
20
2027
Palomino (Ohio, U.S.)
Solar
100 %
200.0
—
2027
Oratorio (Auzouer) (France)
Wind
70 %
8.0
20
2028
Montjean 2 (France)
Wind
70 %
13.5
20
2028
Lotbinière Ndakina (Canada)
Wind
50 %
100.0
30
2028
Frontera (Chile)
Hydro
75 %
109.3
—
1
2029
Peshu Napeu (Canada)
Wind
38 %
300.0
30
2029
Pointe à Neveu (France)
Wind
17.5 %
16.8
20
2030
Nithi Mountain Wind (Canada)
Wind
49 %
200.0
30
2030
Stewart Creek Wind (Canada)
Wind
49 %
200.0
30
2030
K2 Wind (Canada)
Wind
49 %
160.0
30
2031
Total Gross Installed Capacity in Development (MW)
1,337.0
1.
Power to be sold on the open market or through PPAs yet to be signed.
Updated status from the previous quarter for the following projects:
Auxy Bois Régnier
•
Procedures in progress at the Council of State.
•
Geotechnical studies in progress.
Palomino
•
Large Generator Interconnection Agreement received and currently being finalized.
•
Panel deliveries to warehouse initiated and are expected to be complete in Q1 2025.
Oratorio (Auzouer)
•
Opposition procedures in progress.
Montjean 2
•
No change since Q3 2024.
Lotbinière Ndakina
•
Impact study is well advanced.
Frontera
•
In process of quotation for main equipment supplier.
Peshu Napeu
•
Firm for the impact study has been selected.
Pointe à Neveu
•
In queue for interconnection.
Nithi Mountain Wind
•
Project has been selected in BC Hydro's most recent Request for Proposals (RFP).
•
Signature of a 30-year Electricity Purchase Agreement with BC Hydro.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p41
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Stewart Creek Wind
•
Project has been selected in BC Hydro's most recent Request for Proposals (RFP).
•
Signature of a 30-year Electricity Purchase Agreement with BC Hydro.
K2 Wind
•
Project has been selected in BC Hydro's most recent Request for Proposals (RFP).
•
Signature of a 30-year Electricity Purchase Agreement with BC Hydro.
2- OVERVIEW OF OPERATIONS | Construction Activities
The table below outlines the projects that are under construction as at the date of this MD&A.
Name
(Location)
Type
Ownership (%)
Gross installed
capacity (MW)
PPA term
(years)
Expected
COD
Hale Kuawehi (Hawaii, U.S.)
Solar
100
30.0
25 5
2025
Storage
30.0
2
Salvador BESS II (Chile)
Storage
100
20.0
3
- 6
2026
San Andrés BESS II (Chile)
Storage
100
42.0
4
- 6
2026
Rucacura (Chile)
Hydro
100
3.0
- 6
2026
Mesgi'g Ugju's'n 2 (Canada)
Wind
50
102.2
30
2026
La Cense (France)
Wind
70
13.0
20
2026
Total Gross Installed Capacity in
Construction Activities (MW)
240.2
1.
This information is intended to inform readers of the projects' potential impact on the Corporation's results. Actual results may vary. These estimates are up-
to-date as at the date of this MD&A.
2.
Battery storage capacity of 30 MW/120 MWh (4 hours).
3.
Battery storage capacity of 20 MW/100 MWh (5 hours).
4.
Battery storage capacity of 42 MW/210 MWh (5 hours).
5.
PPA is a fixed lump sum capacity payment for the availability of dispatchable energy.
6.
Power to be sold on the open market or through a PPA yet to be signed.
Updated status for the following projects:
Hale Kuawehi
•
Construction is complete.
•
Commissioning activities began in Q4 2024 and are progressing well.
•
Switchyard transferred to HECO.
•
Project COD expected in Q1 2025.
Salvador BESS II
•
Basic engineering, energy storage system procurement and balance of plant tender done.
San Andrés BESS II
•
Basic engineering, energy storage system procurement and balance of plant tender done.
Rucacura
•
Construction has started in Q1 2025.
Mesgi'g Ugju's'n 2 (MU2)
•
Decree allowing the Corporation to launch construction was obtained in Q1 2025.
•
Major contract negotiations to be advanced in Q1 2025.
La Cense
•
Project acquired on January 28, 2025.
•
20-year PPA signed with EDF.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p42
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
2- OVERVIEW OF OPERATIONS | Commissioning Activities
On December 31, 2024, Innergex announced that its Boswell Springs wind farm, located in Wyoming, USA, has reached
commercial operation. The facility commenced delivering clean electricity to the grid earlier during the quarter. The electricity
produced is sold under a 30-year, 320 MW busbar PPA, and is transported to its interconnection point through a newly
constructed 34.5 miles 230 kV generation-tie line built by Innergex.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p43
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
2- OVERVIEW OF OPERATIONS | Operating Facilities
Energy
segment
Location
Three months ended
December 31, 2024
Three months ended
December 31, 2023
Year ended
December 31, 2024
Year ended
December 31, 2023
Production
(MWh)
Production as
a % of LTA
Production
(MWh)
Production as
a % of LTA
Production
(MWh)
Production as
a % of LTA
Production
(MWh)
Production as
a % of LTA
HYDRO
Quebec
151,209
83 %
174,378
96 %
640,968
92 %
732,107
105 %
Ontario
12,644
60 %
16,825
79 %
69,107
93 %
68,660
92 %
British Columbia
448,356
127 %
405,409
109 %
2,166,759
104 %
1,838,825
84 %
United States
64,916
71 %
100,928
110 %
367,700
97 %
431,205
114 %
Chile
157,973
93 %
156,023
99 %
480,340
91 %
489,057
100 %
Subtotal
835,098
102 %
853,563
104 %
3,724,874
99 %
3,559,854
93 %
WIND
Quebec
670,031
101 %
613,819
93 %
2,102,128
91 %
2,000,953
87 %
France
177,711
85 %
268,059
127 %
635,861
91 %
772,334
112 %
United States
662,958
105 %
545,508
86 %
2,406,886
98 %
2,239,051
91 %
Chile
175,539
73 %
180,140
75 %
718,501
76 %
770,101
81 %
Subtotal
1,686,239
97 %
1,607,526
92 %
5,863,376
91 %
5,782,439
90 %
SOLAR
Ontario2
16,972
116 %
20,455
139 %
122,111
107 %
111,804
103 %
United States
195,167
101 %
158,843
80 %
936,300
84 %
931,339
82 %
Chile
61,484
57 %
62,898
59 %
238,327
69 %
236,042
68 %
Subtotal
273,623
87 %
242,196
76 %
1,296,738
83 %
1,279,185
81 %
TOTAL PRODUCTION1
2,794,960
97 %
2,703,285
94 % 10,884,988
93 % 10,621,478
90 %
Innergex's share of production of joint
ventures and associates
80,870
89 %
105,592
116 %
514,595
93 %
539,102
98 %
PRODUCTION PROPORTIONATE1
2,875,830
97 %
2,808,877
94 %
11,399,583
93 %
11,160,580
90 %
1.
Some facilities are treated as joint ventures and associates and accounted for using the equity method; their revenues are not included in the Corporation's consolidated revenues and, for consistency, their electricity
production figures have been excluded from production and included in production proportionate.
2.
The Acquisition of Sault Ste. Marie was completed on March 9, 2023.
Production for the three months ended December 31, 2024, was 97% of LTA. The result is mostly explained by below average wind regimes at the facilities in France and
Chile, lower water flows at the facilities in Quebec, Ontario, United States and in Chile, as well as lower irradiance and economic curtailment at the solar facilities in Chile.
These items were partly offset by higher water flows at the facilities in British Columbia and 130 GWh precommissioning production at the Boswell Springs wind facility in
the United States and a higher wind regime at the Mountain Air facilities in the United States. Innergex's share of production of joint ventures and associates was 89% of
LTA, translating into a Production Proportionate at 97% of LTA.
Production for the year ended December 31, 2024, was 93% of LTA. The result is mostly explained by below average wind regimes at most facilities across all regions,
lower water flows at the facilities in Quebec, Ontario and in Chile, as well as lower irradiance and economic curtailment at the Phoebe solar facility in Texas and at the solar
facilities in Chile. These items were partly offset by higher water flows at the facilities in British Columbia, 130 GWh precommissioning production at the Boswell Springs
wind facility in the United States and higher irradiance at the solar facilities in Ontario. Innergex's share of production of joint ventures and associates was 93% of LTA,
translating into a Production Proportionate at 93% of LTA.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p44
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
3- FINANCIAL PERFORMANCE AND OPERATING RESULTS
Three months ended December 31
Year ended December 31
2024
2023
Change
2024
2023
Change
Revenues
246,295
243,523
2,772
952,453
969,890
(17,437)
Production Tax Credits
39,763
18,003
21,760
94,724
71,684
23,040
Revenues and Production Tax Credits
286,058
261,526
24,532
1,047,177
1,041,574
5,603
Operating expenses
58,498
63,653
(5,155)
233,693
232,795
898
General and administrative expenses
15,732
14,941
791
68,393
69,242
(849)
Prospective projects expenses
10,744
9,084
1,660
38,747
27,162
11,585
ERP implementation
816
3,558
(2,742)
7,574
12,651
(5,077)
Depreciation and amortization
92,687
87,927
4,760
380,676
361,292
19,384
Impairment of long-term assets
44,567
118,857
(74,290)
44,567
118,857
(74,290)
Operating Income (loss)
63,014
(36,494)
99,508
273,527
219,575
53,952
Finance costs
80,710
88,420
(7,710)
340,895
348,386
(7,491)
Other net expenses (income)
3,815
26,170
(22,355)
(3,399)
27,031
(30,430)
Share of earnings of joint ventures and associates
(1,195)
(4,004)
2,809
(15,209)
(16,791)
1,582
Change in fair value of financial instruments
(6,406)
6,973
(13,379)
(32,955)
13,676
(46,631)
Income tax recovery
(47,145)
(32,089)
(15,056)
(42,292)
(46,913)
4,621
Net earnings (loss)
33,235
(121,964)
155,199
26,487
(105,814)
132,301
Net Earnings (Loss) attributable to:
Owners of the parent
29,163
(113,939)
143,102
15,893
(98,451)
114,344
Non-controlling interests
4,072
(8,025)
12,097
10,594
(7,363)
17,957
33,235
(121,964)
155,199
26,487
(105,814)
132,301
Basic net earnings (loss) per share
attributable to owners ($)
0.14
(0.57)
0.05
(0.51)
Diluted net earnings (loss) per share attributable to
owners ($)
0.14
(0.57)
0.05
(0.51)
1.
Some facilities are treated as joint ventures and associates and accounted for using the equity method; their revenues are not included in the Corporation's consolidated revenues.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p45
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
3- FINANCIAL PERFORMANCE AND OPERATING RESULTS | Hydroelectric Segment
Three months ended December 31
Year ended December 31
Hydroelectric Segment
2024
2023
Change
2024
2023
Change
Production (MWh)
835,098
853,563
(18,465) 3,724,874
3,559,854
165,020
LTA (MWh)
816,941
824,442
(7,501) 3,765,981
3,837,919
(71,938)
LTA (%)
102 %
104 %
(2) %
99 %
93 %
6 %
Revenues
86,192
88,679
(2,487)
367,708
358,210
9,498
Operating, general and administrative expenses
21,369
21,567
(198)
89,059
82,097
6,962
Adjusted EBITDA1
64,823
67,112
(2,289)
278,649
276,113
2,536
PROPORTIONATE
Production Proportionate (MWh)
883,839
918,172
(34,333) 4,131,027
3,982,006
149,021
LTA Proportionate (%)
101 %
104 %
(3) %
98 %
93 %
5 %
Revenues Proportionate1
94,172
97,805
(3,633)
418,711
403,517
15,194
Adjusted EBITDA Proportionate1
69,761
73,735
(3,974)
318,191
311,715
6,476
1.
These measures are not recognized measures under IFRS and therefore may not be comparable to those presented by other issuers. Please refer to the Section 6- NON-IFRS MEASURES of this MD&A for more
information.
For the three months ended December 31, 2024, the decrease of 3% in Revenues in the hydroelectric segment compared with the same period last year is mainly
explained by lower production at the Quebec and Curtis Palmer facilities. The decrease is partly compensated by higher production at the facilities in British Columbia and
by higher spot prices at the facilities in Chile. There were no significant impacts on Operating, general and administrative expenses compared with the same period last
year. As a result, Adjusted EBITDA1 decreased by 3% to $64.8 million.
For the three months ended December 31, 2024, the decrease of 4% in Revenues Proportionate1 in the hydroelectric segment mainly stems from the decrease in revenues
from the joint ventures and associates due to lower production at the facilities in British Columbia. The increase of 10% from joint ventures and associates on Operating,
general and administrative expenses is mainly explained by higher maintenance cost at the facilities in British Columbia. As a result, Adjusted EBITDA Proportionate1
decreased by 5% to $69.8 million.
For the year ended December 31, 2024, the increase of 3% in Revenues in the hydroelectric segment compared with the same period last year is mainly explained by
higher production at the facilities in British Columbia. The increase is partly offset by lower production at the Quebec and Curtis Palmer facilities and by lower spot prices at
the facilities in Chile. The increase of 8% in Operating, general and administrative expenses is mainly explained by higher royalties and production tax related to higher
production in British Columbia and higher maintenance cost at the facilities in British Columbia. As a result, Adjusted EBITDA1 increased by 1% to $278.6 million.
For the year ended December 31, 2024, the increase of 4% in Revenues Proportionate1 in the hydroelectric segment mainly stems from the increase in consolidated
revenues and revenues from the joint ventures and associates due to the contribution of the Innavik facility. There were no significant impacts from joint ventures and
associates on Operating, general and administrative expenses compared with the same period last year. As a result, Adjusted EBITDA Proportionate1 increased by 2% to
$318.2 million.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p46
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
3- FINANCIAL PERFORMANCE AND OPERATING RESULTS | Wind Segment
Three months ended December 31
Year ended December 31
Wind Segment
2024
2023
Change
2024
2023
Change
Production (MWh)
1,686,239
1,607,526
78,713 5,863,376
5,782,439
80,937
LTA (MWh)
1,742,289
1,745,617
(3,328) 6,419,081
6,422,505
(3,424)
LTA (%)
97 %
92 %
5 %
91 %
90 %
1 %
Revenues and production tax credits
171,846
153,456
18,390
551,179
536,238
14,941
Operating, general and administrative expenses
31,957
35,542
(3,585)
123,487
131,520
(8,033)
Adjusted EBITDA1
139,889
117,914
21,975
427,692
404,718
22,974
PROPORTIONATE
Production Proportionate (MWh)
1,718,368
1,648,509
69,859 5,971,818
5,899,389
72,429
LTA Proportionate (%)
97 %
93 %
4 %
91 %
90 %
1 %
Revenues and Production Tax Credits Proportionate1
176,864
159,029
17,835
566,611
552,012
14,599
Adjusted EBITDA Proportionate1
143,903
122,317
21,586
439,042
416,634
22,408
1.
These measures are not recognized measures under IFRS and therefore may not be comparable to those presented by other issuers. Please refer to the Section 6- NON-IFRS MEASURES of this MD&A for more
information.
For the three months ended December 31, 2024, Revenues and production tax credits increased by 12% in the wind power generation segment compared with the same
period last year, mainly due to higher prices at the facilities in Chile, a higher production at the Quebec and Mountain Air facilities and precommissioning energy generation
at the Boswell Springs facility. This increase is also explained by a one-time recognition of $16.2 million of production tax credits from previous years in the United States
arising from a change in recoverability estimates. The increase is partly offset by a lower production at the facilities in France and lower prices at the Griffin Trail and Foard
City facilities in the United States. Operating, general and administrative expenses decreased by 10% compared with the same period last year, mainly explained by the
impact of the lower tax on revenues in France. As a result, Adjusted EBITDA1 increased by 19% to $139.9 million, compared with the same period last year.
For the three months ended December 31, 2024, the increase of 11% in Revenues and Production Tax Credits Proportionate1 in the wind power generation segment
compared with the same period last year, mainly stems from the increase in consolidated revenues and production tax credits compared to the same period last year, partly
offset by a decrease in revenues from joint ventures and associates due to lower production at the Dokie facility in British Columbia. There were no significant impacts from
joint ventures and associates on Operating, general and administrative expenses compared with the same period last year. As a result, Adjusted EBITDA Proportionate1
increased by 18% to $143.9 million, compared with the same period last year.
For the year ended December 31, 2024, Revenues and production tax credits increased by 3% in the wind power generation segment compared with the same period last
year, mainly due to higher prices at the facilities in Chile, higher production at the facilities in Quebec and precommissioning energy generation at the Boswell Springs
facility. This increase is also explained by a one-time recognition of $16.2 million of production tax credits from previous years in the United States arising from a change in
recoverability estimates. The increase is partly offset by lower production at the facilities in France and Chile and lower prices at the Griffin Trail and Foard City facilities in
the United States. The decrease of 6% in Operating, general and administrative expenses is mainly explained by the impact of the lower tax on revenues in France. As a
result, Adjusted EBITDA1 increased by 6% to $427.7 million, compared with the same period last year.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p47
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
For the year ended December 31, 2024, the increase of 3% in Revenues and Production Tax Credits Proportionate1 mainly stems from the increase in consolidated
revenues compared to the same period last year. There were no significant impacts from joint ventures and associates on Operating, general and administrative expenses
compared with the same period last year. As a result, Adjusted EBITDA Proportionate1 increased by 5% at $439.0 million, compared to the same period last year.
3- FINANCIAL PERFORMANCE AND OPERATING RESULTS | Solar and Storage Segment
Three months ended December 31
Year ended December 31
Solar and Storage Segment
2024
2023
Change
2024
2023
Change
Production (MWh)
273,623
242,196
31,427
1,296,738
1,279,185
17,553
LTA (MWh)
314,823
319,871
(5,048)
1,570,633
1,587,757
(17,124)
LTA (%)
87 %
76 %
11 %
83 %
81 %
2 %
Revenues
28,020
19,391
8,629
128,290
147,126
(18,836)
Operating, general and administrative expenses
6,603
9,111
(2,508)
29,614
27,496
2,118
Realized loss (gain) on power hedges
2
—
(1,573)
1,573
(3,357)
24,632
(27,989)
Adjusted EBITDA1
21,417
11,853
9,564
102,033
94,998
7,035
1.
These measures are not recognized measures under IFRS and therefore may not be comparable to those presented by other issuers. Please refer to the Section 6- NON-IFRS MEASURES of this MD&A for more
information.
2.
Represents the realized loss on power hedges excluding the $74.5 million realized loss on settlement of the Phoebe power hedge contract concurrent with the Texas Portfolio Transaction, refer to Section1-
HIGHLIGHTS | Financial Year 2024 .
For the three months ended December 31, 2024, Revenues increased by 45% in the solar power generation and storage segment compared with the same period last year,
mainly due to higher production at the United States and Chilean facilities as well as greater prices at the Chilean facilities. The increase is also explained by the
commissioning of the San Andrés battery energy storage facility in May 2024. The decrease of 28% in Operating, general and administrative expenses is explained by
lower maintenance costs at the Ontario and the Chilean facilities. The decrease in realized gain on the power hedges is related to the termination of the Phoebe power
hedge in June 2024. As a result, Adjusted EBITDA1 increased by 81% to $21.4 million, compared with the same period last year.
For the year ended December 31, 2024, Revenues decreased by 13% in the solar power generation and storage segment compared with the same period last year, mainly
due to lower prices at the Phoebe facility in the United States. This decrease is partly compensated by the Sault Ste. Marie Acquisition on March 9, 2023 and the
commissioning of the Salvador and San Andrés battery energy storage facilities in October 2023 and in May 2024, respectively. The increase of 8% in Operating, general
and administrative expenses is explained mainly by a credit in 2023 on transmission toll expenses in Chile. The increase in realized gain on the power hedges is mainly
related to the decrease in merchant prices for the Phoebe power hedge until its termination in June 2024. As a result, Adjusted EBITDA1 increased by 7% to $102.0 million,
compared with the same period last year.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p48
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
3- FINANCIAL PERFORMANCE AND OPERATING RESULTS | Net Earnings
(Loss)
Net earnings of $33.2 million ($0.14 net earnings per share - basic and diluted) for the three months ended
December 31, 2024, compared with net loss of $122.0 million ($0.57 net loss per share - basic and diluted) for the
corresponding period in 2023.
In addition to the operating performance, including the one-time recognition of $16.2 million of production tax credits from
previous years in the United States arising from a change in recoverability estimates, as previously discussed, the
$155.2 million increase in quarter-to-date net earnings mainly stems from:
•
a decrease in impairment of long-term assets, attributable to the $44.6 million impairment charges recognized on the Aela
facilities compared with the $118.9 million impairment charges recognized on the Hale Kuawehi and Hillcrest facilities in
2023;
•
a $22.4 million decrease in other net expenses, mainly due to an unfavourable change in 2023 related to the fair value of
the contingent considerations provision;
•
a $15.1 million increase in income tax recovery, mainly attributable to the recognition of previously unrecognized tax
attributes; and
•
a favourable $13.4 million change in the fair value of financial instruments, mostly attributable the fair value of the
Salvador power hedge.
Net earnings of $26.5 million ($0.05 net earnings per share - basic and diluted) for the year ended December 31, 2024,
compared with net loss of $105.8 million ($0.51 net loss per share - basic and diluted) for the corresponding period in 2023.
In addition to the operating performance, including the one-time recognition of $16.2 million of production tax credits from
previous years in the United States arising from a change in recoverability estimates, as previously discussed, the
$132.3 million increase in year-to-date net earnings mainly stems from:
•
a decrease in impairment of long-term assets, attributable to the $44.6 million impairment charges recognized on the Aela
facilities compared with the $118.9 million impairment charges recognized on the Hale Kuawehi and Hillcrest facilities in
2023;
•
a favourable $46.6 million change in the fair value of financial instruments, mostly attributable to the favourable power
hedge settlements in 2024 compared with the corresponding period in 2023, and the Foard City and Phoebe interest rate
swaps settled concurrent with the Texas Portfolio Transaction; and
•
a $30.4 million increase in other net revenues, mainly due to an unfavourable change in 2023 related to the fair value of
the contingent considerations provision.
These items were partly offset by:
•
a $19.4 million increase in depreciation and amortization, mainly attributable to the acquisitions and commissioning
activities.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p49
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
3- FINANCIAL PERFORMANCE ON OPERATING RESULTS |
Adjusted Net Earnings (Loss)
The Adjusted Net Earnings (Loss)1 seeks to provide a measure that eliminates the earnings impacts of certain derivative
financial instruments and non-recurring events, which do not represent the Corporation's operating performance. Adjusted Net
Earnings (Loss)1 is not a recognized measure under IFRS, has no standardized meaning prescribed by IFRS and therefore
may not be comparable with measures presented by other issuers. Please refer to the "Non-IFRS Measures" section for more
information.
References to "Adjusted Net Earnings (Loss)1" are to net earnings or losses of the Corporation, to which the following
elements are added (subtracted): unrealized portion of the change in fair value of financial instruments, realized loss on the
termination of interest rate swaps, realized gain on foreign exchange forward contracts, realized loss on termination of power
hedges, impairment charges, Enterprise Resource Planning ("ERP") implementation, items that are outside of the normal
course of the Corporation's cash generating operations, the net income tax expense (recovery) related to these items, and the
share of losses of joint ventures and associates related to the above items, net of related tax.
The table below shows a summary statement of Adjusted Net Earnings (Loss)1
.
Please refer to the Section 6- NON-IFRS
MEASURES for a reconciliation to the consolidated statements of earnings (loss):
Three months ended
December 31
Year ended December 31
2024
2023
2024
2023
Revenues and production tax credits
286,058
261,526
1,047,177
1,041,574
Expenses:
Operating
58,498
63,653
233,693
232,795
General and administrative
15,732
14,941
68,393
69,242
Prospective projects
10,744
9,084
38,747
27,162
Depreciation and amortization
92,687
87,927
380,676
361,292
Earnings before the following:
108,397
85,921
325,668
351,083
Finance costs
80,710
88,420
340,895
348,386
Other net expenses (income)
3,684
26,241
(3,475)
27,480
Share of earnings of joint ventures and associates
(1,069)
(3,260)
(14,807)
(15,581)
Realized loss (gain) on power hedges
—
(1,573)
(3,357)
24,632
Recovery of income tax
(43,734)
(16,741)
(49,557)
(31,782)
Adjusted Net Earnings (Loss)1
68,806
(7,166)
55,969
(2,052)
1.
Adjusted Net Earnings is not a recognized measure under IFRS and therefore may not be comparable to those presented by other issuers. Please refer to
tSection 6- NON-IFRS MEASURES for more information.
Adjusted Net Earnings1 of $68.8 million for the three months ended December 31, 2024, compared with Adjusted Net Loss1 of
$7.2 million for the corresponding period in 2023.
In addition to the operating performance, including the one-time recognition of $16.2 million of production tax credits from
previous years in the United States arising from a change in recoverability estimates, as previously discussed, the
$76.0 million increase in Adjusted Net Earnings1 mainly stems from:
•
a $27.0 million increase in income tax recovery, mainly attributable to the recognition of previously unrecognized tax
attributes; and
•
a $22.6 million decrease in other net expenses, mainly due to an unfavourable change in 2023 related to the fair value of
the contingent considerations provision.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p50
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Adjusted Net Earnings1 of $56.0 million for the year ended December 31, 2024, compared with Adjusted Net Loss1 of
$2.1 million for the corresponding period in 2023.
In addition to the operating performance, including the one-time recognition of $16.2 million of production tax credits from
previous years in the United States arising from a change in recoverability estimates, as previously discussed, the
$58.0 million increase in Adjusted Net Earnings1 mainly stems from:
•
a $31.0 million increase in other net income, mainly due to an unfavourable change in 2023 related to the fair value of the
contingent considerations provision;
•
a favourable $28.0 million change in the Phoebe power hedge settlements in 2024 compared with the corresponding
period in 2023; and
•
a $17.8 million increase in income tax recovery, mainly attributable to the recognition of previously unrecognized tax
attributes, partly offset by the Phoebe power hedge settled concurrent with the Texas Portfolio Transaction.
These items were partly offset by:
•
a $19.4 million increase in depreciation and amortization, mainly attributable to the acquisitions and commissioning
activities.
3- FINANCIAL PERFORMANCE AND OPERATING RESULTS | Non-Controlling
Interests
Attribution of earnings of $4.1 million to non-controlling interests for the three months ended December 31, 2024, compared
with an attribution of loss of $8.0 million for the corresponding period in 2023.
The $12.1 million increase in earnings attributed to non-controlling interests is mainly due to:
•
higher revenues from higher production at the hydro facilities in British Columbia;
•
allocation of earnings to the non-controlling interests at the Curtis Palmer hydro facilities, mainly due to an unfavourable
change in fair value of the contingent considerations provision during Q4 2023; and
•
the allocation of earnings to the non-controlling interests in the Phoebe, Griffin Trail and Foard City facilities following the
Texas Portfolio Transaction in June 2024.
Attribution of earnings of $10.6 million to non-controlling interests for the year ended December 31, 2024, compared with an
attribution of loss of $7.4 million for the corresponding period in 2023.
The $18.0 million increase in earnings attributed to non-controlling interests is mainly due to:
•
higher revenues from higher production at the hydro facilities in British Columbia;
•
allocation of earnings to the non-controlling interests at the Curtis Palmer hydro facilities, mainly due to an unfavourable
change in fair value of the contingent considerations provision during Q4 2023; and
•
the allocation of earnings to the non-controlling interests in the Phoebe, Griffin Trail and Foard City facilities following the
Texas Portfolio Transaction in June 2024.
These items were partly offset by:
•
the allocation of losses to the non-controlling interest in Innergex France following the disposition of a non-controlling
interest in Innergex's portfolio in France in Q4 2023.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p51
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
4- CAPITAL AND LIQUIDITY | Capital Structure
The Corporation's capital structure consists of the following components, as shown below:
As at
December 31, 2024
December 31, 2023
Equity1
Common shares2
1,635,157
1,877,713
Preferred shares3
91,804
81,480
Non-controlling interests
393,034
118,445
2,119,995
2,077,638
Long-term loans and borrowings1
Corporate revolving credit facility
241,994
473,725
Other corporate debts
493,840
325,000
Project-level debts
5,253,845
4,889,469
Tax equity financing
358,360
383,100
Convertible debentures
287,543
285,105
Deferred financing costs
(73,214)
(75,252)
6,562,368
6,281,147
8,682,363
8,358,785
1.
Common and preferred shares are presented at their fair value as at December 31, 2024, and December 31, 2023, while non-controlling interests and long-
term loans and borrowings are presented at their respective book value.
2.
Consists of the number of common shares outstanding as at December 31, 2024, and December 31, 2023, multiplied by the prevailing share price of $8.05
(2023 - $9.19) at the close of markets.
3.
Consists of the number of preferred shares outstanding as at December 31, 2024, and December 31, 2023, multiplied by the prevailing share price of $15.26
and $19.96 (2023 - $12.20 and $20.00), for the Series A and Series C preferred shares, respectively, at the close of markets.
Innergex's strategy in managing its capital is: (i) to develop or acquire high-quality renewable power production and storage
facilities that generate sustainable and stable cash flows, with the objective of achieving a high return on invested capital, and
(ii) to pay a dividend.
Innergex determines the amount of capital required, and its allocation between debt and equity, for the acquisition and
development of new electricity-generating facilities by considering the specific characteristics of stability and growth of each
facility. This determination is made in order to distribute a dividend while maintaining an acceptable level of indebtedness.
Generally, the Corporation expects to finance 70% to 85% of its construction costs mostly through non-recourse long-term
debt financing or tax equity financing for qualifying projects in the United States.
The fair value of common shares was impacted mainly by a net unfavourable change in the share price. The preferred shares
structure remained consistent compared to December 31, 2023, and the fair value was impacted by a net favourable change in
the preferred shares price. The increase in non-controlling interests is mainly due to the Texas Portfolio Transaction.
The increase in long-term loans and borrowings is mainly due to the net draws made toward the projects under construction,
partly offset by the repayment of the long-term debt in Phoebe and Foard City concurrent with the Texas Portfolio Transaction,
and by scheduled principal repayments of long-term loans and borrowings.
The effective all-in interest rate on the Corporation's long-term loans and borrowings was 5.25% as at December 31, 2024
(5.26% as at December 31, 2023).
Credit Agreements – Material Financial and Non-Financial Conditions
As at December 31, 2024, the Corporation and its subsidiaries have met all material financial and non-financial conditions
related to their credit agreements, trust indentures and PPAs. When they are not met, certain financial and non-financial
covenants included in the credit agreements, trust indentures and PPAs entered into by various subsidiaries of the Corporation
could limit the capacity of these subsidiaries to transfer funds to the Corporation. These restrictions could have a negative
impact on the Corporation's ability to meet its obligations.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p52
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
4- CAPITAL AND LIQUIDITY | Financial Position
As at
December 31, 2024
December 31, 2023
ASSETS
Current assets
Cash and cash equivalents
181,280
159,244
Restricted cash
37,863
40,099
Other current assets
280,642
318,763
Total current assets
499,785
518,106
Non-current assets
Property, plant and equipment
7,032,301
6,560,814
Intangible assets
1,175,515
1,273,059
Investments in joint ventures and associates
128,091
130,009
Goodwill
138,766
176,608
Other non-current assets
386,378
281,230
Total non-current assets
8,861,051
8,421,720
Total assets
9,360,836
8,939,826
LIABILITIES
Current liabilities
916,918
566,447
Non-current liabilities
Long-term loans and borrowings
5,958,326
6,032,269
Other non-current liabilities
1,047,384
1,135,782
Total non-current liabilities
7,005,710
7,168,051
Total liabilities
7,922,628
7,734,498
SHAREHOLDERS' EQUITY
Equity attributable to owners
1,125,638
1,086,883
Non-controlling interests
393,034
118,445
Total shareholders’ equity
1,518,672
1,205,328
9,441,300
8,939,826
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p53
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Working Capital Items
As at December 31, 2024, working capital1 was negative at $336.7 million, from negative $48.3 million on December 31, 2023,
mainly explained by:
•
Current assets amounted to $580.2 million as at December 31, 2024, a $62.1 million increase compared with
December 31, 2023, mainly explained by a $20.8 million decrease related to derivative financial instruments, and a
$17.3 million decrease in prepaid and others due to timing of payments. The increase in current assets is partly offset
by a $22.0 million increase in cash (please refer to the "Capital and liquidity – Cash Flows" subsection below for more
information).
•
Current liabilities amounted to $916.9 million as at December 31, 2024, a $350.5 million increase compared with
December 31, 2023, mainly due to a $386.6 million increase in the current portion of long-term loans and borrowings
and other liabilities, primarily due to the classification of long-term debts, as current, due to upcoming maturities in the
first two quarters of 2025. The increase is also explained by the classification of certain contingent considerations
provisions as current, which will be paid in the first quarter of 2025. The increase in current liabilities is partly offset by
a $30.5 million decrease related to derivative financial instruments.
As at December 31, 2024, the Corporation had $950.0 million in revolving term credit facility and had drawn $242.0 million as
cash advances, while $2.4 million had been used to issue letters of credit, leaving $705.6 million available. The Corporation
considers its current level of working capital1 and revolving term credit facility availability sufficient to meet its needs.
Non-Current Assets
Non-current assets amounted to $8,861.1 million as at December 31, 2024, an increase of $439.3 million compared with
December 31, 2023. The increase is mainly due to the construction and development activities, contributing to an increase in
property, plant and equipment and project development costs by an aggregate amount of $357.2 million, and to the
appreciation of the U.S. dollar. The increase in non-current assets is also explained by a $75.2 million increase in deferred tax
assets mainly due to the recognition of previously unrecognized tax attributes in Chile and Canada.
These items were partly offset by a depreciation and amortization expense of $380.7 million, and by the recognition of a
$44.6 million impairment charge on the Aela facilities.
Non-Current Liabilities
Non-current liabilities amounted to $7,005.7 million as at December 31, 2024, a decrease of $162.3 million compared with
December 31, 2023. The decrease is mainly due to a $73.9 million decrease in the non-current portion of long-term loans and
borrowings, due to the aforementioned classification of debts as current liabilities, the repayments of the Phoebe and Foard
City project debts, concurrent with the Texas Portfolio Transaction, and the scheduled principal repayments. The decrease is
also due to a $45.4 million decrease in the deferred tax liabilities mainly due to the Texas Portfolio Transaction.
These items were partly offset by the net draws made toward the construction of the Boswell Springs wind, the Hale Kuawehi
solar and battery energy storage and the San Andrés battery energy storage projects, and by the appreciation of the U.S.
dollar.
Derivative financial instruments also favourably impacted non-current liabilities (please refer to the "Financial Position –
Derivative Financial Instruments and Risk Management" subsection below for more information).
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p54
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
1 Working capital represents the excess or deficiency of current assets over current liabilities.
Shareholders' Equity
As at December 31, 2024, Shareholders' equity increased by $313.3 million compared with December 31, 2023. The increase
results largely from the Texas Portfolio Transaction and the total comprehensive income of $130.9 million, partly offset by the
dividends declared on common and preferred shares totalling $78.9 million, the distributions to non-controlling interests
totalling $42.1 million, and the buyback of common shares under the Normal Course Issuer Bid totalling $10.2 million.
Derivative Financial Instruments and Risk Management
The Corporation uses derivative financial instruments ("derivatives") to manage its exposure to the risk of increasing interest
rates on its debt financing, to manage its exposure to exchange rate fluctuations on the future repatriation of cash flows from
its French operations, and to reduce exposure to the risk of decreasing power prices.
The aggregate fair value of derivative financial instruments amounted to a net asset of $67.4 million as at December 31, 2024,
from a net asset of $4.3 million as at December 31, 2023. The increase is attributable to the Phoebe power hedge settled
concurrent with the Texas Portfolio Transaction, partly offset by an unfavourable change in interest hedging derivatives due to
a decrease in the interest rate curves.
Off-Balance-Sheet Arrangements
As at December 31, 2024, the Corporation had issued letters of credit totalling $491.0 million, including $2.4 million from its
corporate facilities, to meet its obligations under its various PPAs and other agreements. These letters of credit were issued as
payment securities for various projects under construction and as performance or financial guarantees under PPAs and other
contractual obligations. As at that date, Innergex had also issued a total of $209.3 million in corporate guarantees used mainly
to guarantee the Corporate bridge loans and certain activities of prospective projects. The corporate guarantees were also
used for payment security related to its construction activities in Hawaii and to meet obligations under PPAs for the Antoigné,
Porcien and Vallottes wind facilities in France.
Tax equity investors in U.S. projects generally require sponsor guarantees as a condition to their investment. To support the
tax equity investments at Foard City, Phoebe, Hillcrest, Griffin Trail and Boswell Springs, Innergex has executed, either directly
or through its Alterra Power Corp subsidiary, guarantees effective on funding of the tax equity investments indemnifying the tax
equity investors against certain breaches of project-level representations, warranties and covenants and other events. The
Corporation believes these indemnifications cover matters that are substantially under its control and are very unlikely to occur.
4- CAPITAL AND LIQUIDITY | Cash Flows
Three months ended
December 31
Year ended December 31
2024
2023
2024
2023
OPERATING ACTIVITIES
Cash flows from operating activities
109,573
80,370
292,165
297,853
FINANCING ACTIVITIES
Cash flows from financing activities
91
256,955
161,769
333,279
INVESTING ACTIVITIES
Cash flows used in investing activities
(118,814)
(328,898)
(438,216)
(633,709)
Effects of exchange rate changes on cash and cash
equivalents
4,063
721
6,318
(1,150)
Net change in cash and cash equivalents
(5,087)
9,148
22,036
(3,727)
Cash and cash equivalents, beginning of year
186,367
150,096
159,244
162,971
Cash and cash equivalents, end of year
181,280
159,244
181,280
159,244
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p55
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Cash Flows from Operating Activities
For the three months ended December 31, 2024, cash flows from operating activities totaled $109.6 million, compared with
cash flows from operating activities of $80.4 million in the same period last year. The increase is mainly due to the
precommissioning energy generation at the Boswell Springs facility, and to the one-time recognition of $16.2 million of
production tax credits from previous years in the United States arising from a change in recoverability estimates.
For the year ended December 31, 2024, cash flows from operating activities totaled $292.2 million, compared with
$297.9 million in the same period last year. The decrease is mainly due to the realized loss on the settlement of the Phoebe
power hedge, partly offset by the realized gain on the settlement of the interest rate swaps upon repayment of the Foard City
and Phoebe project debts, concurrent with the Texas Portfolio Transaction. Excluding this transaction, cash flows from
operating activities for the year ended December 31, 2024 totaled $373.4 million. The increase from the comparative period
mainly stems from the precommissioning energy generation at the Boswell Springs facility, the commissioning of the Salvador
and San Andrés battery energy storage facilities in October 2023 and in May 2024, respectively, and the one-time recognition
of $16.2 million of production tax credits from previous years in the United States arising from a change in recoverability
estimates. The increase is also due to a realized gain on the monetization of certain interest rate swaps in 2024.
Cash Flows from Financing Activities
For the three months ended December 31, 2024, cash flows from financing activities totaled $0.1 million, compared with
$257.0 million used in financing activities in the same period last year. The decrease stems mainly from the net draws of
$28.9 million mainly attributable to the construction activities, compared with the net draws of $212.5 million in the same period
last year, also mainly attributable to the construction activities.
For the year ended December 31, 2024, cash flows from financing activities totaled $161.8 million, compared with
$333.3 million in the same period last year. The decrease stems mainly from the net draws of $73.0 million mainly attributable
to the construction activities, partially offset by the repayment of the Foard City and Phoebe project debts, in connection with
the Texas Portfolio Transaction, compared with the net draws of $443.8 million in the same period last year, mainly attributable
to the construction activities and the Sault Ste. Marie Acquisition. This was partly offset by the disposition of a non-controlling
interest relating to the Texas Portfolio Transaction in 2024, compared with the disposition of a non-controlling interest in the
French portfolio in 2023 and by a reduction on dividends paid on common and preferred shares.
Cash Flows used in Investing Activities
For the three months ended December 31, 2024, cash flows used in investing activities totaled $118.8 million, compared with
$328.9 million in the same period last year. This decrease is mainly due to a decrease in additions to property, plant and
equipment, mainly related to the construction activities at the Boswell Springs wind project and the Hale Kuawehi solar and
battery energy storage project.
For the year ended December 31, 2024, cash flows used in investing activities totaled $438.2 million, compared with
$633.7 million in the same period last year. This decrease is mainly due to a decrease in additions to property, plant and
equipment, mainly related to the construction activities at the Boswell Springs wind project, the Salvador and San Andrés
battery energy storage projects, and the Hale Kuawehi solar and battery energy storage project. The decrease is also due to
the consideration paid toward the Sault Ste. Marie Acquisition in 2023, partly offset by the proceeds obtained on the safe
harbor solar modules' sale and the battery energy storage systems supply agreements termination payments received in 2023.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p56
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
4- CAPITAL AND LIQUIDITY | Free Cash Flow and Payout Ratio
Year ended December 31
Free Cash Flow and Payout Ratio1
2024
2023
2022
Cash flows from operating activities2
292,165
297,853
430,243
Add (Subtract) the following items:
Changes in non-cash operating working capital items
16,873
33,401
14,518
Prospective projects expenses
38,747
27,162
24,740
Maintenance capital expenditures, net of proceeds from dispositions
(10,683)
(25,316)
(11,051)
Scheduled debt principal payments
(185,946)
(186,458)
(156,862)
Free Cash Flow attributed to non-controlling interests3
(41,426)
(38,377)
(29,271)
Dividends declared on Preferred shares
(5,632)
(5,632)
(5,632)
Chile portfolio refinancing - hedging impact5
4,853
4,578
2,578
Add (subtract) the following specific items4:
Realized gain on termination of interest rate swaps5
(16,957)
2,405
(71,735)
Realized gain on termination of foreign exchange forwards6
—
—
(43,458)
Realized loss on termination of power hedges7
74,496
—
—
Principal and interest paid related to pre-acquisition period
—
1,312
—
Acquisition, integration and ERP implementation expenses
10,340
15,948
17,918
Gains realized on strategic transactions8
37,111
88,054
—
Free Cash Flow1
213,941
214,930
171,988
Weighted Average Number of Common Shares (in 000s)
202,446
203,565
201,836
Free Cash Flow per Share1
1.06
1.06
0.85
Dividends declared on common shares
73,219
147,058
146,957
Payout Ratio1
34 %
68 %
85 %
1.
Free Cash Flow, Free Cash Flow per Share and Payout Ratio are not recognized measures under IFRS and therefore may not be comparable to those
presented by other issuers. Please refer to Section 6- NON-IFRS MEASURES for more information.
2.
Cash flows from operating activities for the year ended December 31, 2022 include the one-time BC Hydro Curtailment Payment received during Q1 2022.
3.
The portion of Free Cash Flow attributed to non-controlling interests is subtracted, regardless of whether an actual distribution to non-controlling interests is
made, in order to reflect the fact that such distributions may not occur in the period they are generated.
4.
Certain items are excluded from the Free Cash Flow and Payout Ratio calculations as they are deemed not representative of the Corporation's long-term
cash-generating capacity, and include items such as realized gains and losses on contingent considerations related to past business acquisitions, transaction
costs related to realized acquisitions, ERP implementation expenses, realized losses or gains on refinancing of certain borrowings or settlement of derivative
financial instruments before their contractual maturity, and tax payments related to fiscal strategies for the purpose of improving the long-term cash
generating capacity of Innergex. Gains realized on strategic transactions, which allow the Corporation to finance its growth without having to increase
leverage or dilute shareholders, are also added to the Free Cash Flow and Payout Ratio.
5.
The Free Cash Flow for the year ended December 31, 2022 excludes the $71.7 million realized gain on settlement of the interest rate hedges entered into to
manage the Corporation's exposure to the risk of increasing interest rates during the negotiations surrounding the refinancing of the non-recourse debt
assumed in the Aela Acquisition and at Innergex’s existing Chilean projects. Instead, the gain is amortized in the Free Cash Flow using the effective interest
rate method over the period covered by the unwound hedging instruments.
6.
The Free Cash Flow for the year ended December 31, 2022, excludes the $43.5 million realized gain on settlement of the foreign exchange forward contracts
concurrent with the closing of the French Acquisition.
7.
The Free Cash Flow for the year ended December 31, 2024, excludes the $74.5 million realized loss on settlement of the Phoebe power hedge contract
concurrent with the disposition of non-controlling interests in Innergex's operating portfolio in Texas.
8.
The Free Cash Flows for the years ended December 31, 2024 and December 31, 2023 include gains over funds invested following the disposition of non-
controlling interests in Innergex's operating portfolio in Texas, and the disposition of a 30% non-controlling participation in Innergex's French operating and
development portfolio, respectively. Such gains realized on strategic transactions are net of tax.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p57
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Free Cash Flow
For the year ended December 31, 2024, the Corporation generated Free Cash Flow1 of $213.9 million, compared with
$214.9 million for the corresponding period last year.
Free Cash Flow1 decreased by $1.0 million compared with Free Cash Flow1 in the comparative period, mainly due to:
•
a decrease in the gains realized on strategic transactions, relating to the French portfolio during Q4 2023 compared
to the Texas Portfolio Transaction during Q2 2024;
•
the lower production at the wind facilities in France, at the hydro facilities in Quebec and at the Curtis Palmer
facilities; and
•
an increase in Free Cash Flow1 attributed to non-controlling interests mainly attributable to the Texas Portfolio
Transaction.
These items were partly offset by:
•
the higher production at the hydro facilities in British Columbia;
•
the contribution to cash flows from operating activities from the commissioning of the Salvador and San Andrés
battery energy storage facilities, as well as the Boswell Springs wind facility;
•
the one-time recognition of $16.2 million of production tax credits from previous years in the United States arising
from a change in recoverability estimates;
•
a decrease in maintenance capital expenditures; and
•
a decrease in finance costs paid and scheduled principal repayments mainly stemming from the repayment of the
Foard City and Phoebe project debts in connection with the Texas Portfolio Transaction.
Free Cash Flow per Share
For the year ended December 31, 2024, the Free Cash Flow1 generated by the Corporation divided by the weighted-average
number of shares outstanding amounted to $1.06, stable compared to the corresponding period last year.
Scheduled debt principal payments
Innergex’s facilities have useful lives exceeding the current amortization period for existing debt. The table below presents a
comparison of the project-level debt maturities compared to their power purchase agreements' ("PPA") maturities and useful
lives:
As at December 31, 2024
Long-term loans
and borrowings,
before deferred
financing costs
Remaining years
to debt Maturity1
Remaining years
to PPA Maturity1
Remaining useful
life1
Corporate debt and convertible debentures
1,023,377
3.0
3.3
31.6
Project-level debt:
Chile Green Bonds
1,021,264
11.5
11.0
33.8
Hydro
1,952,282
23.8
26.2
61.7
Wind
1,939,294
5.2
8.3
19.9
Solar
341,005
2.6
8.1
24.6
Tax equity financing
358,360
4.9
7.1
25.9
6,635,582
11.2
13.0
39.3
1.
Figures provided in years on a weighted average basis.
Assuming debt amortization schedules were aligned with the useful lives of the assets, and including the gains realized on
strategic transactions, the Free Cash Flow and Free Cash Flow per Share for the year ended December 31, 2024, would have
been $242.3 million and $1.20, respectively ($248.2 million and $1.22, respectively for the same period last year).
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p58
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
1 Free Cash Flow is not a recognized measure under IFRS and therefore may not be comparable to those presented by other issuers. Please refer to
Section 6- NON-IFRS MEASURES for more information.
Payout Ratio
For the year ended December 31, 2024, the dividends on common shares declared by the Corporation amounted to 34% of
Free Cash Flow1, compared with 68% for the corresponding period last year.
4- CAPITAL AND LIQUIDITY | Information on Capital Stock
The Corporation’s Equity Securities
As at
February 19, 2025
December 31, 2024
December 31, 2023
Number of common shares
203,125,034
203,125,034
204,321,381
Number of 4.75% convertible debentures1
148,023
148,023
148,023
Number of 4.65% convertible debentures1
142,056
142,056
142,056
Number of Series A Preferred Shares
3,400,000
3,400,000
3,400,000
Number of Series C Preferred Shares
2,000,000
2,000,000
2,000,000
Number of stock options outstanding
294,375
322,220
289,111
1.
The 4.75% and the 4.65% debentures mature on June 30, 2025, and October 31, 2026, respectively.
As at December 31, 2024, the decrease in the number of common shares since December 31, 2023, was due to the
1,276,702 common shares purchased and cancelled by the Corporation under the Normal Course Issuer Bid for a total cash
consideration of $10.6 million, partly offset by the issuance of 80,355 common shares related to the DRIP.
Under the Dividend Reinvestment Plan, Innergex has the discretion to either purchase the additional common shares in the
open market or issue them from treasury. Since the April 15, 2024 dividend and for future dividends declared until further
notice, Innergex has decided to purchase common shares in the secondary market at the average price (excluding any
brokerage commissions, fees and service charges) per common share paid by the agent for all common shares acquired in
respect of an investment period being the Market Purchase Price (as defined in the Plan).
Normal Course issuer Bid
The Corporation received approval from the Toronto Stock Exchange ("TSX") to proceed with a normal course issuer bid on its
common shares (the "Bid"). Under the Bid, the Corporation could purchase for cancellation up to 10,220,086 of its common
shares, representing approximately 5.0% of the 204,401,736 issued and outstanding common shares of the Corporation as at
February 21, 2024. The Bid commenced on February 26, 2024, and will terminate on February 25, 2025.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p59
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
4- CAPITAL AND LIQUIDITY | Dividends
The Corporation's dividend policy is determined by its Board of Directors and is based on the Corporation's operating results,
cash flows, financial condition, debt covenants, long-term growth prospects, solvency test imposed under corporate law for the
declaration of dividends and other relevant factors.
The following dividends were declared by the Corporation:
Three months ended December 31
Year ended December 31
2024
2023
2024
2023
($/share)
Total
($/share)
Total
($/share)
Total
($/share)
Total
Dividends declared on common shares
0.0900 18,281 0.1800 36,778 0.3600 73,219 0.7200 147,058
Dividends declared on Series A
Preferred Shares
0.2028
689 0.2028
689 0.8110
2,757 0.8110
2,757
Dividends declared on Series C
Preferred Shares
0.3594
719 0.3594
719 1.4375
2,875 1.4375
2,875
The following dividends will be paid by the Corporation on April 15, 2025:
Date of
announcement
Record date
Payment date
Dividend per
common share
Dividend per Series A
Preferred Share
Dividend per Series C
Preferred Share
February 20, 2025
March 31, 2025
April 15, 2025
$0.0900
$0.2028
$0.3594
On February 21, 2024, the Board of Directors approved an update to its capital allocation strategy and revised its annual
dividend for 2024 to $0.36 per common share to support its growth plans.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p60
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
5- OUTLOOK | 2024 Guidance Achievements
In 2024, the Corporation met its 2024 Growth Targets.
2024
Actual
Target Range
Adjusted EBITDA Proportionate1
760,593
725,000
775,000
Free Cash Flow per Share1
1.06
0.70
0.85
1.
These measures are not recognized measures under IFRS and therefore may not be comparable to those presented by other issuers. Production is a key
performance indicator for the Corporation that cannot be reconciled with an IFRS measure. Please refer to the "Non-IFRS Measures" section of this MD&A
for more information.
The financial targets were met mainly due to:
▪
Favourable production at the hydro facilities in British Columbia;
▪
Favourable production at the solar facilities in Ontario;
▪
The successful commissioning of the Salvador and San Andrés battery storage facilities in October 2023 and in
May 2024, respectively;
▪
The successful commissioning of the Boswell Springs wind facility in Q4 2024;
▪
A one-time recognition of $16.2 million of production tax credits from previous years in the United States arising from
a change in recoverability estimates; and
▪
Gains realized upon disposition of non-controlling interests in the Texas Portfolio Transaction.
5- OUTLOOK | 2025 Growth Targets
2025
Target Range
Adjusted EBITDA Proportionate1
825,000
875,000
Free Cash Flow per Share1 ($/share)
0.75
0.95
1.
These measures are not recognized measures under IFRS and therefore may not be comparable to those presented by other issuers. Please refer to the
"Non-IFRS Measures" section of this MD&A for more information.
The Corporation presents its 2025 growth targets for which it used certain assumptions to provide readers with an indication of
its business activities and operating performance. These assumptions include:
•
Average hydrology, wind regimes and solar irradiation projections corresponding to 100% LTA target at our operating
facilities;
•
No material changes compared to current assumed U.S. dollar to Canadian dollar and Euro to Canadian dollar
exchange rate;
•
Assets availability corresponding approximately to 95%;
•
Full-year contribution of the projects added to the operating portfolio in 2024;
•
Success in commissioning projects under construction with COD expected in 2025;
•
Availability of capital resources and timely performance by third parties of contractual obligations;
•
No significant event occurring outside the ordinary course of business such as a natural disaster, pandemic or other;
•
Average merchant spot prices consistent with external price curves and internal forecasts;
•
No significant variability in interest rates;
•
An average inflation rate based on banking institution forecasted inflation; and
•
An increase in salaries based on market average assumptions.
These assumptions are based on information currently available to the Corporation and this list of assumptions is not
exhaustive. These assumptions, although considered reasonable by the Corporation on February 20, 2025, may prove to be
inaccurate. Important risks and uncertainties may cause actual results or performance to be materially different from the
Corporation’s expectations as set forth in this section. The risks and uncertainties are referred to in the "Risks and
Uncertainties" section of this MD&A.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p61
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
6- NON-IFRS MEASURES
This MD&A has been prepared in accordance with IFRS. However, some measures referred to in this MD&A are not recognized measures under IFRS and therefore may
not be comparable to those presented by other issuers. Innergex believes these indicators are important, as they provide management and the reader with additional
information about Innergex's production and cash generation capabilities, its ability to pay a dividend and its ability to fund its growth. These indicators also facilitate the
comparison of results over different periods. Revenues and Production Tax Credits Proportionate, Adjusted EBITDA, Adjusted EBITDA Proportionate, Adjusted Net Loss,
Free Cash Flow, Free Cash Flow per Share and Payout Ratio are not measures recognized by IFRS and have no standardized meaning prescribed by IFRS.
Revenues and Production Tax Credits Proportionate, Adjusted EBITDA and Adjusted EBITDA Proportionate
Description of the measures
References in this document to "Revenues and Production Tax Credits Proportionate" are to Revenues and Production Tax Credits, plus Innergex's share of Revenues and
Production Tax Credits of the joint ventures and associates.
References in this document to “Adjusted EBITDA” are to operating income, to which are added (deducted) depreciation and amortization, ERP implementation, impairment
charges, and the realized portion of the change in fair value of power hedges. References in this document to "Adjusted EBITDA Proportionate" are to Adjusted EBITDA,
plus Innergex's share of Adjusted EBITDA of the joint ventures and associates.
Innergex believes that the presentation of these measures enhances the understanding of the Corporation's operating performance. Adjusted EBITDA is used by investors
to evaluate the operating performance and cash-generating operations, and to derive financial forecasts and valuations. Revenues and Production Tax Credits
Proportionate and Adjusted EBITDA Proportionate measures are used by investors to evaluate the contribution of the joint ventures and associates to the Corporation’s
operating performance and cash generating operations, and the contribution of such for financial forecasts and valuations purposes. Readers are cautioned that Revenues
and Production Tax Credits Proportionate, should not be construed as an alternative to Revenues and Production Tax Credits, as determined in accordance with IFRS.
Readers are also cautioned that Adjusted EBITDA and Adjusted EBITDA Proportionate, should not be construed as an alternative to operating income, as determined in
accordance with IFRS. Please refer to Section 3- FINANCIAL PERFORMANCE AND OPERATING RESULTS for more information.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p62
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Below is a reconciliation of the non-IFRS measures to their closest IFRS measures:
Three months ended December 31, 2024
Three months ended December 31, 2023
Consolidation
Share of joint
ventures
Proportionate
Consolidation
Share of joint
ventures
Proportionate
Revenues
246,295
12,998
259,293
243,523
14,699
258,222
Production tax credits
39,763
—
39,763
18,003
—
18,003
Revenues and Production Tax Credits
286,058
12,998
299,056
261,526
14,699
276,225
Operating income
63,014
4,392
67,406
(36,494)
6,681
(29,813)
Depreciation and amortization
92,687
4,560
97,247
87,927
4,345
92,272
Impairment of long-term assets
44,567
—
44,567
118,857
—
118,857
ERP implementation
816
—
816
3,558
—
3,558
Realized loss on power hedges
—
—
—
1,573
—
1,573
Adjusted EBITDA
201,084
8,952
210,036
175,421
11,026
186,447
Year ended December 31, 2024
Year ended December 31, 2023
Consolidation
Share of joint
ventures
Proportionate
Consolidation
Share of joint
ventures
Proportionate
Revenues
952,453
66,435
1,018,888
969,890
61,081
1,030,971
Production tax credits
94,724
—
94,724
71,684
—
71,684
Revenues and Production Tax Credits
1,047,177
66,435
1,113,612
1,041,574
61,081
1,102,655
Operating income
273,527
32,704
306,231
219,575
30,962
250,537
Depreciation and amortization
380,676
18,188
398,864
361,292
16,556
377,848
Impairment of long-term assets
44,567
—
44,567
118,857
—
118,857
ERP implementation
7,574
—
7,574
12,651
—
12,651
Realized gain (loss) on power hedges
1
3,357
—
3,357
(24,632)
—
(24,632)
Adjusted EBITDA
709,701
50,892
760,593
687,743
47,518
735,261
1.
Represents the realized loss on power hedges excluding the $74.5 million realized loss on settlement of the Phoebe power hedge contract concurrent with the Texas Portfolio Transaction, refer to Section1-
HIGHLIGHTS | Financial Year 2024 .
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p63
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Adjusted Net Earnings (Loss)
References to "Adjusted Net Earnings (Loss)" are to net earnings or losses of the Corporation, to which the following elements are added (subtracted): unrealized portion of
the change in fair value of derivative financial instruments; realized loss on the termination of interest rate swaps, realized gain on foreign exchange forward contracts,
realized loss on termination of power hedges, impairment charges, ERP implementation, items that are outside of the normal course of the Corporation's cash generating
operations, the net income tax expense (recovery) related to these items, and the share of loss (earnings) of joint ventures and associates related to the above items, net of
related income tax.
The Adjusted Net Earnings (Loss) seeks to provide a measure that eliminates the earnings impacts of certain derivative financial instruments and other items that are
outside of the normal course of the Corporation's cash generating operations, which do not represent the Corporation's operating performance. Innergex
uses derivative financial instruments to hedge its exposure to various risks. Accounting for derivatives requires that all derivatives be marked-to-market. When hedge
accounting is not applied, changes in the fair value of the derivatives are recognized directly in net earnings (loss). Such unrealized changes have no immediate cash effect,
may or may not reverse by the time the actual settlements occur and do not reflect the Corporation’s business model toward derivatives, which are held for their long-term
cash flows, over the life of a project. In addition, the Corporation uses foreign exchange forward contracts to hedge its net investment in its French subsidiaries.
Management therefore believes realized gains (losses) on such contracts do not reflect the operations of Innergex.
Innergex believes that the presentation of this measure enhances the understanding of the Corporation's operating performance. Adjusted Net Earnings (Loss) is used by
investors to evaluate and compare Innergex’s profitability before the impacts of the unrealized portion of the change in fair value of derivative financial instruments and other
items that are outside of the normal course of the Corporation's cash generating operations. Readers are cautioned that Adjusted Net Earnings (Loss) should not be
construed as an alternative to net earnings, as determined in accordance with IFRS. Please refer to Section 3- Adjusted Net Earnings (Loss) for more information.
Below is a reconciliation of Adjusted Net Earnings (Loss) to its closest IFRS measure:
Three months ended
December 31
Year ended December 31
2024
2023
2024
2023
Net earnings (loss)
33,235
(121,964)
26,487
(105,814)
Add (Subtract):
Share of unrealized portion of the change in fair value of financial instruments of joint ventures and
associates, net of related income tax
(198)
(1,186)
(634)
(1,917)
Unrealized portion of the change in fair value of financial instruments
(13,363)
6,141
(87,137)
(9,649)
Impairment of long-term assets
44,567
118,857
44,567
118,857
Realized loss on termination of power hedges
—
—
74,496
—
Realized gain on termination of interest rate swaps
6,957
2,405
(16,957)
(1,307)
ERP implementation
816
3,558
7,574
12,651
Realized gain on foreign exchange forward contracts
131
(71)
76
(449)
Income tax (recovery) expense related to above items
(3,339)
(14,906)
7,497
(14,424)
Adjusted Net Earnings (Loss)
68,806
(7,166)
55,969
(2,052)
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p64
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Below is a reconciliation of Adjusted Net Earnings (Loss) adjustments to each line item of the consolidated statements of earnings:
Three months ended
December 31, 2024
Three months ended
December 31, 2023
Year ended December 31, 2024
Year ended December 31, 2023
IFRS
Adj.
Non-IFRS
IFRS
Adj.
Non-IFRS
IFRS
Adj.
Non-IFRS
IFRS
Adj.
Non-IFRS
Revenues
246,295
—
246,295 243,523
—
243,523 952,453
— 952,453 969,890
— 969,890
Production Tax Credits
39,763
—
39,763
18,003
—
18,003 94,724
—
94,724
71,684
—
71,684
Operating expenses
58,498
—
58,498
63,653
—
63,653 233,693
— 233,693 232,795
— 232,795
General and administrative
expenses
15,732
—
15,732
14,941
—
14,941 68,393
—
68,393
69,242
—
69,242
Prospective projects expenses
10,744
—
10,744
9,084
—
9,084 38,747
—
38,747
27,162
—
27,162
ERP implementation
816
(816)
—
3,558
(3,558)
—
7,574
(7,574)
—
12,651 (12,651)
—
Depreciation and amortization
92,687
—
92,687
87,927
—
87,927 380,676
— 380,676 361,292
— 361,292
Impairment of long-term assets
44,567 (44,567)
— 118,857 (118,857)
— 44,567
(44,567)
— 118,857 (118,857)
—
Operating income
63,014 45,383
108,397
(36,494) 122,415
85,921 273,527
52,141 325,668 219,575 131,508 351,083
Finance costs
80,710
—
80,710
88,420
—
88,420 340,895
— 340,895 348,386
— 348,386
Other net expenses (income)
3,815
(131)
3,684
26,170
71
26,241 (3,399)
(76)
(3,475)
27,031
449
27,480
Share of (earnings) losses of
joint ventures and associates
(1,195)
126
(1,069)
(4,004)
744
(3,260) (15,209)
402 (14,807) (16,791)
1,210 (15,581)
Change in fair value of financial
instruments
(6,406)
6,406
—
6,973
(8,546)
(1,573) (32,955)
29,598
(3,357)
13,676 10,956
24,632
Recovery of income tax
(47,145)
3,411
(43,734)
(32,089)
15,348
(16,741) (42,292)
(7,265) (49,557) (46,913) 15,131 (31,782)
Net earnings (loss)
33,235 35,571
68,806 (121,964) 114,798
(7,166) 26,487
29,482
55,969 (105,814) 103,762
(2,052)
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p65
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Free Cash Flow, Free Cash Flow per Share and Payout Ratio
Description of the measures
References to “Free Cash Flow” are to cash flows from operating activities before changes in non-cash operating working capital items, less prospective projects expenses,
maintenance capital expenditures net of proceeds from dispositions, scheduled debt principal payments, the portion of Free Cash Flow attributed to non-controlling
interests, preferred share dividends declared, and gains realized on strategic transactions, plus or minus other elements that are not representative of the Corporation's
long-term cash-generating capacity, such as realized gains and losses on contingent considerations related to past business acquisitions, transaction costs related to
realized acquisitions, expenses related to the implementation of a cloud-based ERP solution, realized losses or gains on refinancing of certain borrowings or settlement of
derivative financial instruments before their contractual maturity, and tax payments related to fiscal strategies for the purpose of improving the long-term cash generating
capacity of Innergex.
References to “Free Cash Flow per Share” are to Free Cash Flow divided by the weighted-average number of common shares outstanding during the period.
Free Cash Flow is a measure of the Corporation's ability to pay a dividend and its ability to fund its growth from its cash generating operations, in the normal course of
business, and through strategic transactions. Free Cash Flow per Share is a measure of the Corporation's ability to derive shareholder returns on a per-share basis from its
cash generating operations, in the normal course of business, and through strategic transactions.
Innergex believes that the presentation of these measures enhance the understanding of the Corporation's cash generation capabilities, its ability to pay a dividend and its
ability to fund its growth. In addition, Free Cash Flow per Share enhances the understanding of the impacts to shareholder returns regarding the Corporation's capital
structure decisions. Free Cash Flow and Free Cash Flow per Share are used by investors in this regard. Readers are cautioned that Free Cash Flow and Free Cash Flow
per Share should not be construed as an alternative to cash flows from operating activities, as determined in accordance with IFRS. Please refer to Section 4- Free Cash
Flow and Payout Ratio for the reconciliation of Free Cash Flow.
References to “Payout Ratio” are to dividends declared on common shares divided by Free Cash Flow. Innergex believes that this is a measure of its ability to pay a
dividend and its ability to fund its growth. Payout Ratio is used by investors in this regard.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p66
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
7- ADDITIONAL CONSOLIDATED INFORMATION | Geographic Segments –
Revenues
Three months ended December 31
Year ended December 31
2024
2023
2024
2023
Revenues and Production Tax
Credits
Canada
124,949
116,119
479,315
441,631
United States
87,457
64,211
300,001
323,293
Chile
45,619
35,713
169,177
151,040
France
28,033
45,483
98,684
125,610
286,058
261,526
1,047,177
1,041,574
7- ADDITIONAL CONSOLIDATED INFORMATION | Geographic Segments –
Non-current Assets
As at
December 31, 2024
December 31, 2023
Non-current assets, excluding derivative financial instruments and
deferred tax assets1
Canada
3,230,350
3,355,393
United States
3,062,545
2,597,848
Chile
1,637,409
1,585,033
France
704,661
731,897
8,634,965
8,270,171
1.
Includes the investments in joint ventures and associates.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p67
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
7- ADDITIONAL CONSOLIDATED INFORMATION | Historical Quarterly Financial Information
Three months ended
(in millions of dollars, unless otherwise stated)
Dec 31,
2024
Sep 30,
2024
Jun 30,
2024
Mar 31,
2024
Dec 31,
2023
Sep 30,
2023
Jun 30,
2023
Mar 31,
2023
Production (MWh)
2,794,960
2,595,984
2,971,065
2,522,980
2,703,285
2,654,439
2,951,098
2,312,655
Revenues and Production Tax Credits
286.1
258.6
260.0
242.5
261.5
292.2
269.5
218.3
Operating income (loss)
63.0
71.6
75.8
63.0
(36.5)
99.8
93.3
63.0
Adjusted EBITDA1
201.1
171.0
172.9
164.7
175.4
180.2
187.0
145.1
Net earnings (loss)
33.2
7.9
23.0
(37.7)
(122.0)
4.4
24.8
(13.0)
Net (loss) earnings attributable to owners of the
parent
29.2
8.2
19.9
(41.4)
(113.9)
9.1
20.7
(14.3)
Basic net (loss) earnings attributable to owners of
the parent ($ per share)
0.14
0.03
0.09
(0.21)
(0.57)
0.04
0.10
(0.08)
Diluted net (loss) earnings attributable to owners
of the parent ($ per share)
0.14
0.03
0.09
(0.21)
(0.57)
0.04
0.10
(0.08)
Dividends declared on common shares
18.3
18.3
18.3
18.3
36.8
36.8
36.8
36.7
Dividends declared on common shares,
$ per share
0.090
0.090
0.090
0.090
0.180
0.180
0.180
0.180
1.
Adjusted EBITDA is not a recognized measure under IFRS and therefore may not be comparable to those presented by other issuers. Please refer to the Section 6- NON-IFRS MEASURES for more information.
The Corporation's production, revenues, net earnings and cash flows are variable with each season, depending on the geography and source of energy. Please refer to the
"Overview of Operations | Business Environment - Seasonality of Operations" section of this MD&A for more information on seasonality.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p68
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
8- ACCOUNTING POLICIES AND INTERNAL CONTROLS | Material Accounting
Policies
Changes in accounting policies
Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
In January 2020, the IASB issued amendments to IAS 1 Presentation of Financial Statements, to clarify the classification of
liabilities as current or non-current. On October 31, 2022, the IASB issued Non-current Liabilities with Covenants
(Amendments to IAS 1) (the 2022 amendments), to improve the information a company provides about long-term debt with
covenants. The Corporation adopted the amendments on January 1, 2024, with no impact to the consolidated financial
statements.
New accounting standards and interpretations issued but not yet effective
Presentation and Disclosure in Financial Statements (IFRS 18)
In April 2024, the IASB issued a new Accounting Standard, IFRS 18 Presentation and Disclosure in Financial Statements,
which will replace IAS 1 Presentation of Financial Statements. IFRS 18 will introduce the following main changes from IAS 1:
–
improved consistency and structure in the Statement of Earnings, including:
–
formally defined Operating Profit and Profit or Loss before Financing and Income Tax subtotals;
–
Operating, Investing and Financing income and expenses categories, based on a company's main business
activities; and
–
an analysis of the Operating expenses by function or by nature, directly on the face of the Statement of Earnings,
with details regarding their nature in the notes when expenses are presented by function in the Statement of
Earnings.
–
new guidance regarding Management-defined Performance Measures ("MPMs"); and
–
new guidance regarding aggregation of items in the financial statements.
The new standard is effective for annual periods beginning on or after January 1, 2027, and applies retrospectively.
Early adoption is permitted. The impact on the Corporation's financial statements is being assessed by Management.
Power Purchase Agreements (Amendments to IFRS 9 and IFRS 7)
In December 2024, the IASB issued amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments:
Disclosures, which include changes and clarifications regarding power purchase agreements ("PPAs"), as follows:
–
clarifications on the application of the own-use exemption for purchasers of power purchase agreements ("PPAs"),
allowing, by analogy, the seller to apply the own-use exemption if the entity has been, and expects to be, a net-seller
of electricity for the contract period;
–
the possibility for entities to designate a variable nominal volume of forecasted sales of renewable electricity as the
hedged transaction, rather than a fixed volume based on highly probable estimates, facilitating an economic offset
between the hedging instrument and the hedged transaction, enabling companies to apply hedge accounting; and
–
additional disclosure requirements, such as
–
contractual features exposing the company to variability in electricity volume;
–
qualitative information about how an entity assessed whether a contract might become onerous; and
–
qualitative and quantitative information about the costs and proceeds associated with sales of electricity, based
on the information used to determine whether the company is a net-seller of electricity for the contract period.
These amendments apply for annual reporting periods beginning on or after January 1, 2026. Earlier application is permitted.
The impact for the Corporation is being assessed by management.
Amendments to IFRS 9 (Accounting for electronic payments)
The IASB has issued amendments to IFRS 9 and IFRS 7 in May 2024. These amendments related to classification of financial
assets and accounting for settlement by electronic payments. Following the amendments to IFRS 9, companies that recognize
or derecognize financial assets or financial liabilities on the payment initiation date could see a change to their accounting as a
general requirement is added that reiterate the following requirements:
–
financial instruments are recognized when an entity becomes a party to a contract;
–
a financial asset is derecognized when rights to the cash flows expire, or the asset is transferred; and
–
a financial liability is derecognized when it is settled, which is the date on which the liability is extinguished.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p69
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
The amendments allow an exception that would apply only for financial liabilities. The exception would allow a company to
derecognize a financial liability before the settlement date, when it uses an electronic payment system and, after initiating the
payment, when:
–
it has no practical ability to withdraw, stop or cancel the payment instruction;
–
it has no practical ability to access the cash to be used for settlement as a result of the payment instruction; and
–
the settlement risk associated with the electronic payment system is insignificant.
These amendments apply for annual reporting periods beginning on or after January 1, 2026. Earlier application is permitted.
The impact for the Corporation is being assessed by management.
8- ACCOUNTING POLICIES AND INTERNAL CONTROLS | Internal Controls
In accordance with Regulation 52-109 respecting Certification of Disclosure in Issuers' Annual and Interim Filings, the
President and Chief Executive Officer and the Chief Financial Officer of the Corporation have certified that they have designed,
or caused it to be designed under their supervision:
•
Disclosure controls and procedures (“DC&P”) to provide reasonable assurance that: (i) material information relating to
the Corporation is made known to the President and Chief Executive Officer and the Chief Financial Officer by others,
particularly during the period in which the annual filings are being prepared; and (ii) the information required to be
disclosed by the Corporation in its annual filings, interim filings and other reports filed or submitted by it under
securities legislation is recorded, processed, summarized and reported within the time periods specified in securities
legislation.
•
Internal control over financial reporting (“ICFR”) to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with IFRS.
The President and Chief Executive Officer and the Chief Financial Officer of the Corporation have evaluated, or caused it to be
evaluated under their supervision, the effectiveness of the Corporation’s DC&P and ICFR as at December 31, 2024, and have
concluded that they were effective at the financial year-end. During the period beginning on October 1, 2024, and ended on
December 31, 2024, there was no change to the ICFR that has materially affected, or is reasonably likely to materially affect,
the Corporation's ICFR.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p70
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
9- RISKS AND UNCERTAINTIES
Corporate Risk Management and Board Oversight
The Corporation is committed to proactive strong risk governance and oversight practices supported by the Board of Directors
and members of the management.
The Board of Directors is responsible to review and assess material risks associated with the Corporation’s business, which
may adversely affect it, its activities, its financial condition or reputation. More specifically, the Board of Directors ensures that
the Corporation has implemented systems to effectively identify, manage and monitor the principal risks associated with its
business and to mitigate or reduce their potential negative impacts. The Board of Directors receives updates on specific risks
and risk mitigation activities from management and each of the relevant committee.
Responsibility for risk management is shared across the organization from each segment of activities. The Investment and
Risk Oversight Committee, which is comprised of senior management members, reviews all existing and emerging risks and
assesses appropriate mitigation measures. The Committee also supervises, among others, the management of risks inherent
to investment management. Risk oversight also occurs at the level of operating subsidiaries of the Corporation, to ensure that
risks are efficiently managed at every level of its corporate structure. New risks or important risks are identified and reported
together with mitigation plans and discussed across all levels of the Corporation’s corporate structure. The risks that have
been identified, which may affect certain aspects of the activities of the Corporation or which are encountered in decision-
making processes, are presented to the Board of Directors at each meeting, either by its committees or the officers of the
Corporation. Such risks are presented in relation to conjuncture, strategy and in relation to any proposed transactions
presented to the Board of Directors. The Board of Directors takes an active role discussing risk management with its
committees to ensure that risks are properly identified, assessed and effectively managed at all levels of the Corporation’s
activities. Internal audit is an additional tool to validate the effectiveness and efficiency of risk management across all aspects
of the Corporation’s business.
The Corporation maintains policies and a Code of conduct, applicable to all directors, officers and employees of the
Corporation and those of its subsidiaries, as well as any consultant or other person when representing the Corporation. Such
policies and Code of conduct are reviewed at least annually by the Board of Directors. These policies and the Code of conduct
aim to promote sound risk management throughout the Corporation, to delegate authority appropriately among its officers and
to set limits for authorizations required to approve and execute certain business transactions. As part of such policies, the
officers of the Corporation are responsible for maintaining effective communication with the Board of Directors and the
employees of the Corporation, to implement and promote a culture of efficient risk management throughout the Corporation’s
activities. Through strategic planning approved by the Board of Directors, the officers are also responsible to assess the risk
management activities. The Board of Directors’ risk management oversight aims to ensure that risks are identified, reduced
and mitigated, where possible. However, these risks cannot always be identified or be completely eliminated from the
Corporation’s activities.
The Corporation is exposed to various risks and uncertainties and has outlined below those that it considers material. There
may also exist additional risks and uncertainties that are not currently known to the Corporation or that are now believed to be
immaterial that may adversely affect the Corporation's business. Those risks could have a material adverse effect on the
Corporation’s business, operations, financial condition and results.
Risks Related to Operations
Equipment Supply
The Corporation’s development and operation of power generating facilities is dependent on the supply of equipment from
third parties. Equipment pricing, production timeline, or delivery delay may rapidly increase depending, among other things, on
equipment availability, raw material prices, geopolitical economic factors and on the market for such products. Any significant
increase in the price, or delays to supply the equipment, could negatively affect the future profitability of the Corporation’s
facilities and the Corporation’s ability to develop other projects. There is no guarantee that manufacturers will meet all their
contractual obligations concerning complete fulfilment, in due time, of equipment supply. Mitigation measures may be
necessary to offset delays, supply chain disruptions or any other circumstance emanating from suppliers, such as putting in
place partnerships with suppliers or advancing equipment acquisitions. Legal recourses may also be necessary to compensate
the Corporation’s development and construction projects and its operating facilities. Failure of any supplier of the Corporation
to meet its commitments would adversely affect the Corporation’s ability to complete projects on schedule and to honour its
obligations.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p71
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Global Climate Change: Variability in Hydrology, Wind Regimes and Solar Irradiance
Global climate change, including the impacts of global warming, presents a risk that could adversely affect the Corporation’s
business, results of operations and cash flows. Variability in hydrology, wind regimes and solar irradiation and their
predictability may be affected by unforeseen weather patterns. To the extent weather conditions are affected by climate
change, customers’ energy use and the Corporation's power generation could increase or decrease depending on the duration
and magnitude of these changes.
The inability to meet the LTAs could materially affect the Corporation’s business, including results of operations and cash
flows, as well as its reputation with customers, investors, and financial markets.
Global Climate Change: Extreme Weather Events
Global climate change, including the impacts of global warming, represents a risk that could adversely affect the Corporation’s
business, results of operations and cash flows. Unforeseen extreme weather events, such as hurricanes, windstorms,
hailstorms, rainstorms, ice storms, floods, severe winter weather and forest fires could affect the Corporation's production.
Extreme weather events create a risk of physical damage to the Corporation’s assets and power outages and increase the
potential likelihood of disruptions to its generation and transmission facilities. As a result, the Corporation could suffer costs,
losses and damages, all or some of which may not be recoverable through insurance, legal, regulatory cost recovery or other
processes and could materially affect the Corporation’s business, including results of operations and cash flows, and its
reputation with customers, investors, local communities, regulators, governments and financial markets. Resulting costs could
include reconstruction, repower, regeneration, asset replacement, increased insurance premium and any losses incurred by
third parties.
IT Security Risks and Cyberattacks
The Corporation is dependent on various information technologies to carry out multiple business activities. A successful cyber
intrusion, such as, and not limited to, unauthorized access, personal information and confidential information leak (or identity
theft), malicious software or other violations on the system that controls generation and transmission at any of our offices or
facilities could severely disrupt or otherwise affect business operations. Such attacks on our data information base systems
through theft, alteration or destruction and the inability to recover promptly could impact individuals, business partners, our
operation capabilities, generate unexpected expenses impacting profitability, damage the Corporation's reputation and result in
additional liabilities (e.g. investigation, litigation, fines, remedial action).
With the continuous evolution of cyberattacks and having most employees working from home, the risk of the occurrence of IT-
related security incidents is increased.
Increase in Water Rental Cost or Changes to Regulations Applicable to Water Use
The Corporation is required to make rental payments for water rights once its projects are in commercial operation. Significant
increases in water rental costs in the future or changes in the way that governments who regulate water supply or apply such
regulations (including those of Quebec, BC and Ontario in Canada, Idaho and New York in the U.S. and Chile) where the
Corporation has hydroelectric Operating Facilities, could have a material adverse effect on the Corporation’s business,
operating results, financial condition or prospects.
Performance of Major Counterparties, Delays, Cost Overruns
The Corporation enters into a variety of agreements with third-party suppliers. Should one or more major counterparties be
unable to meet their obligations under the contracts, this could result in unexpected costs, losses and delays for the
Corporation.
Delays and cost overruns may occur in completing the construction of the Development Projects and the development and
construction of Prospective Projects and future projects that the Corporation will undertake. A number of factors that could
cause such delays or cost overruns include, without limitation, permitting delays, construction pricing escalation, changing
engineering and design requirements, the performance of contractors, labour disruptions, adverse weather conditions and the
availability of financing. Even when complete, a facility may not operate as planned due to design or manufacturing flaws,
which may not all be covered by warranty. Mechanical breakdown could occur in equipment after the period of warranty has
expired, resulting in loss of production as well as the cost of repair. In addition, if the Development Projects are not brought into
commercial operation within the delay stipulated in their PPA, the Corporation may be subject to penalty payments or the
counterparty may be entitled to terminate the related PPA.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p72
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Non compliance with project site regulatory requirements leading to penalties, fines and other
consequences
Non compliance with project site regulatory requirements, including operational and cybersecurity obligations, may result in
penalties, fines or other consequences for the Corporation.
Impacts of failure to comply with project's environmental commitments or requirements throughout
project lifetime
The Corporation must comply with environmental commitments and requirements throughout the lifetime of the projects (from
development to construction and operation). Not respecting these requirements could end up in significant financial or
operational penalties or permit revocation.
Equipment Failure, Unexpected Operations and Maintenance Activity and Increased Asset Maintenance
on Ageing Equipment
The Corporation’s facilities are subject to the risk of equipment failure due to the deterioration of the asset from use or age,
latent defect and design or operator error, among other things. To the extent that a facility’s equipment requires longer-than-
forecast down times for maintenance and repair, or suffers disruptions of power generation for other reasons, the Corporation’s
business, operating results, financial condition or prospects could be adversely affected. Maintenance due to ageing
equipment could also result in more costly repairs and longer downtime periods.
Health and Safety Risks
The ownership, construction and operation of the Corporation’s power generation assets carry an inherent risk of liability
related to worker health and safety, including the risk of government-imposed orders to remedy unsafe conditions, potential
penalties for contravention of health and safety laws, licences, permits and other approvals, and potential civil liability.
Compliance with health and safety laws (and any future changes) and the requirements of licences, permits and other
approvals, such as sound level and other operational restrictions, remain material to the Corporation’s business. The
Corporation has incurred and will continue to incur significant capital and operating expenditures to comply with health and
safety laws and to obtain and comply with licences, permits and other approvals and to assess and manage its potential
liability exposure. Nevertheless, the Corporation may become subject to government orders, investigations, inquiries or other
proceedings (including civil claims) relating to health and safety matters. Certain risks (including injury or loss of life) inherent
in the occurrence of natural disasters may also impact the Corporation. The occurrence of any of these events or any changes,
additions to or more rigorous enforcement of, health and safety laws, licences, permits or other approvals could have a
significant impact on operations and/or result in additional material expenditures. Further, potential penalties may be incurred
for failing to adequately protect workers or other stakeholders from foreseeable hazards at our sites. Consequently, no
assurances can be given that additional environmental and workers’ health and safety issues relating to currently known or
unknown matters will not require unanticipated expenditures, or result in fines, penalties or other consequences (including
changes to operations) material to its business and operations.
Availability and Reliability of Transmission Systems
The Corporation’s ability to sell electricity is impacted by the availability of the various transmission systems in each
jurisdiction. The failure of existing transmission facilities, the lack of adequate transmission capacity or delays in construction
would have a material adverse effect on the Corporation’s ability to deliver electricity to its various counterparties or to the point
of interconnection, thereby affecting the Corporation’s business, operating results, financial condition or prospects.
Resource Assessment and Performance Variability
The amount of energy generated by the Corporation’s hydroelectric facilities depends on the availability of water flows. There
is no certainty that the long-term availability of such resources will remain unchanged. The Corporation’s revenues may be
significantly affected by events that impact the hydrological conditions of the Corporation’s hydroelectric facilities such as low
and high-water flows within the watercourses on which the Corporation’s hydroelectric facilities are located. In the event of
severe flooding, the Corporation’s hydroelectric facilities may be damaged. Similarly, the amount of energy generated by the
Corporation’s wind farms will depend upon the availability of wind, which is naturally variable. A reduced or increased amount
of wind at the location of one of the wind farms over an extended period may reduce the production from such facility and may
reduce the Corporation’s revenues and profitability. Finally, the amount of energy to be generated by the Corporation’s solar
farms will depend on the availability of solar irradiation, which is naturally variable. Lower solar irradiation levels at the
Corporation’s solar farms over an extended period may reduce the production from such facilities and the Corporation’s
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p73
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
revenues and profitability. Variability in hydrology, wind regimes and solar irradiation and their predictability may also be
affected by climate changes that may provoke unforeseen deviations from historical trends.
The strength and consistency of the water, wind and solar resources at power facilities of the Corporation may vary from what
the Corporation anticipates. Electricity production estimates of the Corporation are based on assumptions and factors that are
inherently uncertain, which may result in actual electricity production being different from the estimates of the Corporation,
including (i) the extent to which the limited time period of the site-specific hydrological, wind or solar data accurately reflects
long-term water flows, wind speeds and solar irradiation; (ii) the extent to which historical data accurately reflects the strength
and consistency of the water, wind and solar resources in the future; (iii) the strength of the correlation between the site-
specific water, wind and solar data and the longer-term regional data; (iv) the potential impact of climatic factors and climate
change; (v) the accuracy of assumptions on a variety of factors, including but not limited to weather, ice build-up on wind
turbines and snow accumulation and soiling on solar panels, site access, wake and transmission losses and wind shear; (vi)
the accuracy with which anemometers measure wind speed, and the difference between the hub height of the wind turbines
and the height of the meteorological towers used for data collection; (vii) the potential impact of topographical variations,
turbine placement and local conditions, including vegetation; (viii) the inherent uncertainty associated with the specific
methodologies and related models, in particular future-orientated models, used to project the water, wind and solar resource;
and (ix) the potential for electricity losses to occur before delivery.
Resource and operating sites performance variability could result in the Corporation delivering less than the required quantity
of electricity as agreed in a given contract year and therefore be in default under its respective PPA. Penalty payments could
then be payable to the relevant purchaser by the Corporation and the payment of any such penalties could adversely affect the
revenues and profitability of the Corporation.
Preparedness to Facing Natural Disasters and Force Majeure
The Corporation’s facilities, operations and projects under development are exposed to potential damage, partial or full loss,
resulting from environmental disasters (e.g. floods, high winds, fires, and earthquakes), equipment failures or other unforeseen
events. The occurrence of a significant event that disrupts or delays the ability of the Corporation’s power generation assets to
produce or sell power for an extended period, including events that preclude existing customers under PPAs from purchasing
electricity, could have a material negative impact on the business of the Corporation. The Corporation’s generation assets
could be exposed to effects of severe weather conditions, natural disasters and potentially catastrophic events such as a major
accident or incident. The occurrence of such an event may not release the Corporation from performing its obligations
pursuant to PPAs, power hedges or other agreements with third parties. Furthermore, force majeure events affecting the
Corporation's assets could result in damages to the environment or harm third parties. In addition, many of the Corporation’s
projects are in remote areas, making access for repair of damage difficult.
Hazards such as unusual or unexpected geologic formations, pressures, downhole conditions, rockslides, other events
associated with steep terrain, mechanical failures, blowouts, cratering, localized ground subsidence, localized ground inflation,
pollution and other physical and environmental risks can affect the Corporation's development and production activities. These
hazards could result in substantial losses including injury and loss of life, severe damage to and destruction of property and
equipment, pollution and other environmental damage and suspension of operations.
Pandemics, Epidemics or Other Public Health Emergencies
The Corporation’s business, workforce, results of operations, financial condition, cash flows and stock price can be adversely
affected by pandemics, epidemics or other public health emergencies, which may result in governments around the world
implementing increasingly stringent measures to help control the spread of pathogens, including quarantines, “shelter in place”
and “stay at home” orders, travel restrictions, business curtailments, school closures, and other measures. In addition,
governments and central banks in several parts of the world may enact fiscal and monetary stimulus measures to counteract
the impacts of such public health emergencies. Business disruptions could impact our suppliers, which in turn could impact the
operating results of the Corporation. Should an outbreak become widespread, procurement of equipment and spare parts may
be impacted and construction, operation and maintenance of the Corporation’s assets may be halted or delayed and
negatively impact the business, financial condition and results of operations of the Corporation.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p74
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Risks Related to Corporate Strategy
Inability to Secure New Profitable PPAs
Securing profitable PPAs with an appropriate IRR (internal rate of return) over the life of the PPA is key to ensuring the viability
and the profitability of Innergex. As projects are bid multiple years in advance of their commissioning and are subject to
competition pressure and other uncontrollable factors such as rising prices for key components, it is difficult to bid
competitively and maintain profitable margins over the project PPA life. Should projects be bid with lower-than-required
margins, or should margins be lost over the course of construction or operations, the project's financial viability is impacted
over its lifetime.
Inability to renew PPAs at adequately profitable prices
At PPA renewal, the Corporation may be unable to renew a PPA at prices initially modeled at the outset of the initial PPA due to
a limited client base in certain markets, geopolitical factors and/or limited transmission capacity. There is no assurance that the
Corporation will be successful in negotiating PPA renewals on equivalent terms and conditions upon the expiry of their
respective terms.
Failure to bring projects into commercial operation within contractually stipulated delay
If the Development Projects are not brought into commercial operation within the delay stipulated in their respective PPA or
power hedges, the Corporation may be subject to penalty payments or termination under such agreement(s).
Regulatory and Political Risks
The development and operation of power generating facilities are subject to changes in governmental regulatory requirements
and the applicable governing statutes, including regulations related to the environment, unforeseen environmental effects,
general economic conditions and other matters beyond the control of the Corporation.
Moreover, the operation of power generating facilities is subject to extensive regulation by various government agencies at the
municipal, provincial, state and federal levels. There is always the risk of changes being made in government policies and
laws, which may result in increased rates or tariffs, such as for water rentals, and for income, capital and municipal taxes.
Those changes could also adversely affect the revenues of the Corporation.
The Corporation holds permits and licences from various regulatory authorities for the construction and operation of its
facilities. These licences and permits are critical to the operation of the Corporation’s business. Most of these permits and
licences are long-term in nature, reflecting the anticipated useful life of the facilities. In some cases, these permits may need to
be renewed prior to the end of the anticipated useful life of such facilities and there is no guarantee that such renewals will be
granted or on which conditions they will be renewed. These permits and licences require the Corporation’s compliance with the
terms thereof.
Risks related to U.S. Production and Investment Tax Credits, Changes in U.S. Corporate Tax Rates and
Availability of Tax Equity Financing
The Corporation owns interest in projects for which on- and off-site project activities are or were performed to qualify for U.S.
renewable tax incentives (PTCs or ITCs). There can be no assurance that the projects will qualify for PTCs or ITCs or, if they
do, that they will qualify for full PTCs or ITCs. There also can be no assurance that the PTCs or ITCs will continue to be
available. Any new tax rule, regulation or other guidance promulgated (as the same may be amended, updated or otherwise
modified from time to time, including the Inflation Reduction Act passed in 2022) in the U.S. may jeopardize or otherwise
impede the effectiveness of such on- and off-site project activities qualifying such projects for the full value of PTCs or ITCs.
Qualification of the projects for PTCs or ITCs is critical to obtaining tax equity financing for wind and solar projects. The
inability to qualify the projects for PTCs or ITCs, in whole or in part, would adversely affect the financing options for those
projects. If the qualification of a project for PTCs or ITCs is not successful, there may be a material impairment of the
Corporation’s investment in that project.
Other government actions could be taken that could, directly or indirectly, inhibit the Corporation’s ability to raise tax equity
financing. For example, following the tax reform enacted in late-2017, lower corporate tax rates in the U.S. may impact the
amount of available tax equity investment for specific projects or generally in the market, impeding our ability to obtain enough
amounts of tax equity investment on terms and at rates beneficial to the Corporation and its projects.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p75
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Increases in operational cost and financial uncertainty surrounding development of new facilities
The Corporation participates in the construction and development of new power generating facilities. These facilities have
greater uncertainty surrounding their feasibility, social acceptance and future profitability than existing Operating Facilities with
established track records. As policy and regulation impacting renewable energy progresses and evolves across all of the
jurisdictions in which Innergex does business, increases in fees, taxes, rents, and other mechanisms used by governments to
generate revenue could unexpectedly increase our operational costs.
The Corporation is in some cases required to advance funds and post-performance bonds during development of its new
facilities. If some of these facilities are not completed or do not operate to the expected specifications, or unforeseen costs or
taxes are incurred, the Corporation could be adversely affected.
Social Acceptance of Renewable Energy Projects
The social acceptance by First Nations and Indigenous communities, local communities and local stakeholders is critical to our
ability to find and develop new sites suitable for viable renewable energy projects. Failure to obtain proper social acceptance
for a project may prevent the development and construction of a project and lead to the loss of all investments made in the
development and the write-off of such prospective project.
Inability to Secure Appropriate Land
There is significant competition for appropriate sites for new power generating facilities. Optimal sites are difficult to identify
and obtain given that geographic features, legal restrictions and ownership rights naturally limit the areas available for site
development. There can be no assurance that the Corporation will be successful in obtaining any particular site in the future.
Obtainment of Permits
The Corporation does not currently hold all the approvals, licences and permits required for the construction and operation of
the Development Projects or the Prospective Projects, including environmental approvals and permits necessary to construct
and operate the Development Projects or the Prospective Projects. The failure to obtain or delays in obtaining all necessary
licences, approvals or permits, including renewals thereof or modifications thereto, could result in construction of the
Development Projects or the Prospective Projects being delayed or not being completed or commenced. There can be no
assurance that any one Prospective Project will result in any actual operating facility.
In addition, delays may occur in obtaining necessary government approvals required for future power projects. From time to
time, and to secure long lead times required for ordering equipment, the Corporation may place orders for equipment and
make deposits thereon or advance projects prior to obtaining all required permits and licences. The Corporation only takes
such actions where it reasonably believes that such licences or permits will be forthcoming in due course prior to the
requirement to expend the full amount of the purchase price. However, any delay in permitting could adversely affect the
Corporation.
Environmental permits to be issued regarding any of the Development Projects or the Prospective Projects may contain
conditions that need to be satisfied prior to obtaining a PPA, to start construction, during construction and during and after the
operation of the Development Projects. It is not possible to predict the conditions imposed by such permits or the cost of any
mitigating measures required by such permits.
Volatility of Supply and Demand in the Energy Market
A portion of the Corporation’s revenues are tied, either directly or indirectly, to the wholesale market price for electricity in the
markets in which the Corporation operates. Wholesale market electricity prices are impacted by a number of factors including
the management of generation and the amount of excess generating capacity relative to load in a particular market; the
structure of the electricity market; and weather conditions (such as extremely hot or cold weather) that impact electrical load.
There is uncertainty surrounding the trend in electricity demand growth, which is notably influenced by macroeconomic
conditions; absolute and relative energy prices; and energy conservation and demand-side management. Therefore, from a
supply perspective, there are uncertainties associated with the timing of generating plant retirements that are in part driven by
environmental regulations, and by the scale, pace and structure of replacement capacity.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p76
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Exposure to Many Different Forms of Taxation in Various Jurisdictions
The Corporation is subject to many different forms of taxation in various jurisdictions throughout the world, including but not
limited to, income tax, withholding tax, tax on capital, property tax, sales tax, transfer tax, social security and other payroll
related taxes, which may be amended or may lead to disagreements with tax authorities regarding the application of tax law.
Tax law and administration are extremely complex and often require the Corporation to make subjective determinations. The
computation of taxes involves many factors, including the interpretation of tax legislation in various jurisdictions in which the
Corporation is or may become subject to tax assessments. The Corporation’s estimate of tax-related assets, liabilities,
recoveries and expenses incorporates significant assumptions. These assumptions include, but are not limited to, the tax rates
in various jurisdictions, the effect of tax treaties between jurisdictions and taxable income projections. To the extent that such
assumptions differ from actual results, the Corporation may have to record additional tax expenses and liabilities, including
interest and penalties.
Purchaser's inability to fulfill contractual obligations or refusal to accept delivery of power under power
purchase agreements or power hedges
The power generated by the Corporation is mostly sold under long-term power purchase agreements and in some cases under
power hedges and commercial or industrial retail contracts. If, for any reason, any of the purchasers of power under such
PPAs were unable or unwilling to fulfill their contractual obligations under the relevant PPA or if they refuse to accept delivery
of power pursuant to the relevant PPA, the Corporation’s business, operating results, financial condition or prospects could be
adversely affected.
Changes in Governmental Support to Increase Electricity to be Generated from Renewable Sources by
Independent Power Producers
Development and growth of renewable energy is partially dependent on governmental support, policies and incentives. Many
governments have introduced portfolio standards, tax credits and other incentives to increase the portion of renewable energy
in their electricity generation supply mix to reduce greenhouse gas emissions over time. There is a risk that governmental
support providing incentives for renewable energy could change at any time and that additional increase in the procurement of
renewable energy projects from independent power producers could be reduced or suspended at any time. As a result, the
Corporation may face reduced ability to develop its prospective projects and may suffer material write-offs of prospective
projects.
Fluctuations Affecting Prospective Power Prices
If the Corporation is unable to secure or renew PPAs for its development assets or maintain or renew PPAs for its operating
assets or contracts for the sale of 100% of generation, the Corporation may be forced to sell electrical power generated at
market price. Although most of the output at the Foard City Wind Farm, and the Salvador Solar Farm are sold under long-term
PPAs, output not sold under these agreements is and will be subject to merchant prices.
The market price of power in individual jurisdictions can be volatile and may be incapable of being controlled. If the price of
electricity should drop significantly during such time the Corporation is forced to sell electrical power generated at market price,
or increase significantly, when the Corporation is forced to purchase third party power at merchant prices, the economic
prospects of the operating facilities that rely, in whole or in part, on merchant prices, such as the Foard City Wind Farm, the
Phoebe Solar Farm, the Salvador Solar Farm, the Griffin Trail Wind Farm, the Licán Hydro Facility, the Miller Creek Facility or
development projects in which the Corporation has an interest, could be significantly reduced or rendered uneconomic. A
material reduction or increase in such prices, as applicable, or a non-material reduction in such prices coupled with the impact
of the aggregate risks described above, could have a material adverse effect on the Corporation’s financial condition.
Relationships with Indigenous Communities and Stakeholders
The Corporation enters into various types of arrangements with communities or joint venture partners for the development of
its projects. Certain of these partners may have or develop interests or objectives that are different from or even in conflict with
the objectives of the Corporation. Any such differences could have a negative impact on the success of the Corporation’s
projects. The Corporation is sometimes required through the permitting and approval process to notify and consult with various
groups, including Indigenous communities, landowners, municipalities and other stakeholders. Any unforeseen delays in this
process may negatively impact the ability of the Corporation to complete any given project on time or at all.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p77
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Inability of the Corporation to Execute its Strategy for Building Shareholder Value
The Corporation’s strategy for building shareholder value is to acquire or develop high-quality renewable power production
facilities that generate sustainable cash flows and provide an attractive risk-adjusted return on invested capital, and to pay a
dividend. However, there is no certainty that the Corporation will be able to acquire or develop high-quality renewable power
production facilities at attractive prices to supplement its growth. Furthermore, this strategy may require the divestiture by the
Corporation of certain assets, to pursue new opportunities, to support or realize the benefits of completed or future
acquisitions, raise additional capital and/or lower the debts of the Corporation.
The successful execution of this strategy requires careful timing and business judgment, the resources to complete the
development of power generating facilities, as well as an accurate assessment of the assets of the Corporation and the value
that it would receive in exchange for their divestiture. The Corporation may underestimate the costs necessary to bring power
generating facilities into commercial operation, may be unable to quickly and efficiently integrate new acquisitions into its
existing operations, inaccurately evaluate the value of its assets or be unable to find a purchaser therefor in a manner that
supports the Corporation’s strategy in a timely fashion.
Inability to Raise Additional Capital and the State of the Capital Market
Future development and construction of new facilities, the development of the Development Projects and the Prospective
Projects and other capital expenditures will be financed by the Corporation out of cash generated from its Operating Facilities,
borrowing or the issuance and sale of additional equity. To the extent that external sources of capital, including issuance of
additional securities of the Corporation, become limited or unavailable, the Corporation’s ability to make necessary capital
investments to construct or maintain existing or future facilities would be impaired. There is no certainty that sufficient capital
will be available on acceptable terms to fund further development or expansion. There are numerous renewable energy
projects to be constructed in the coming years that will result in competition for capital. In addition, payment of dividends may
impair the Corporation’s ability to finance its ongoing and future projects.
Furthermore, the Corporation’s capital-raising efforts could involve the issuance and sale of additional Common Shares, or
debt securities convertible into its Common Shares, which, depending on the price at which such shares or debt securities are
issued or converted, could have a material dilutive effect on holders of the Corporation’s Common Shares and adversely
impact the trading price of the Corporation’s Common Shares.
Risks Related to Financing
Liquidity Risks Related to Derivative Financial Instruments
Derivative financial instruments are entered into with major financial institutions and their effectiveness is dependent on the
performance of these institutions. Failure by one of them to perform its obligations could involve a liquidity risk. Liquidity risks
related to derivative financial instruments also include the settlement of bond forward contracts on their maturity dates and the
early termination option included in some interest rate swap contracts and foreign exchange contracts.
The occurrence of any of the foregoing could have a material adverse effect on the Corporation’s business, financial condition
and results of operations. The Corporation uses derivative financial instruments to manage its exposure to the risk of an
increase in interest rates on its debt financing or of foreign currency variation. The Corporation does not own or issue financial
instruments for speculation purposes.
The nature of the Corporation’s energy and risk management activities creates exposure to financial risks, which include, but
are not limited to: (i) unfavourable movements in commodity prices, interest rates or foreign exchange that could result in a
financial or opportunity loss to the Corporation; (ii) a lack of counterparties, due to market conditions or other circumstances,
could leave the Corporation unable to liquidate or offset a position, or unable to do so at or near the previous market price;
(iii) the Corporation may not receive funds or instruments from counterparties at the expected time or at all; (iv) the
counterparty could fail to perform an obligation owed to the Corporation; (v) loss as a result of human error or deficiency in the
Corporation’s systems or controls; and (vi) loss as a result of contracts being unenforceable or transactions being inadequately
documented.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p78
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Interest Rate Fluctuations and Refinancing
Interest rate fluctuations are of particular concern to a capital-intensive industry such as the electric power business. The
Corporation faces interest rate and debt refinancing risk in respect of floating-rate bank credit facilities used for construction
and long-term financings. The Corporation’s ability to refinance debt on favourable terms is dependent on debt capital market
conditions, which are inherently variable and difficult to predict. Interest rate fluctuation and refinancing risks could affect the
Corporation’s ability to raise additional capital.
Foreign Exchange Fluctuations
The Corporation often purchases equipment from foreign suppliers. As such, the Corporation may be exposed to changes in
the Canadian dollar in relation to the foreign currency-denominated equipment purchases. Our development work and
operations in Canada, France, the U.S. and Latin America make us subject to foreign currency fluctuations.
Some of our revenue and costs are denominated in currencies other than the Canadian dollar. Foreign exchange fluctuations
may impact our results as they are reported in Canadian dollars.
Our functional and reporting currency is the Canadian dollar. As such, our foreign investments, operations costs and assets will
be exposed to net changes in currency exchange rates. Volatility in exchange rates could have an adverse effect on our
business, financial condition and operating results.
Changes in General Economic Conditions
Changes in general economic conditions could have an effect on the assessment of the value of the Corporation’s assets,
affecting its ability to raise capital, through financing, re-financing, divestiture of certain assets or generally its ability to execute
its strategy. Furthermore, most of the PPAs of the Corporation have a fixed price adjusted annually for inflation on a CPI
formula basis. If the inflation is lower than expected or if it decreases, the Corporation’s projected revenues and Projected
Adjusted EBITDA and free cash flow may be lower than expected or reduced, which would respectively impact the payout
ratio.
Financial Leverage and Restrictive Covenants Governing Current and Future Indebtedness
The Corporation’s and its subsidiaries’ operations are subject to contractual restrictions contained in the instruments governing
any of their current and future indebtedness. The degree to which the Corporation and its subsidiaries are leveraged could
have important consequences to shareholders, including: (i) the Corporation’s and its subsidiaries’ ability to obtain additional
financing for working capital, capital expenditures, acquisitions or other project developments in the future may be limited; (ii) a
significant portion of the Corporation’s and its subsidiaries’ cash flows from operations may be dedicated to the payment of the
principal of and interest on their indebtedness, thereby reducing funds available for future operations; (iii) certain of the
Corporation’s and its subsidiaries’ borrowings will be at variable rates of interest, which exposes the Corporation and its
subsidiaries to the risk of increased interest rates; and (iv) the Corporation and its subsidiaries may be more vulnerable to
economic downturns and be limited in their ability to withstand competitive pressures.
The Corporation and its subsidiaries are subject to operating and financial restrictions through covenants in certain loan, equity
finance and security agreements. These restrictions prohibit or limit the Corporation’s and its subsidiaries’ ability to, among
other things, incur additional debt, provide guarantees for indebtedness, create liens, dispose of assets, liquidate, dissolve,
amalgamate, consolidate or effect any corporate or capital reorganization, make distributions or pay dividends, issue any
equity interests and create subsidiaries. These restrictions may limit the Corporation’s and its subsidiaries’ ability to obtain
additional financing, withstand downturns in the Corporation’s and its subsidiaries’ business and take advantage of business
opportunities. Moreover, the Corporation and its subsidiaries may be required to seek additional debt or equity financing on
terms that include more restrictive covenants, require repayment on an accelerated schedule or impose other obligations that
limit the Corporation’s or its subsidiaries’ ability to grow the business, acquire assets or take other actions the Corporation or
its subsidiaries might otherwise consider appropriate or desirable.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p79
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Other Risks
Possibility that the Corporation May Not Declare a Dividend or May Reduce the Amount of the Dividend
Holders of Common Shares, Series A Shares and Series C Shares do not have a right to dividends on such shares unless
declared by the Board of Directors. The Corporation does not face any restrictions that would prevent it from paying out
dividends or distributions. The declaration and the amount of dividends is at the discretion of the Board of Directors even if the
Corporation has enough funds, net of its liabilities, to pay such dividends.
The Corporation may not declare or pay a dividend if the Corporation's cash available for distribution is not sufficient or if there
are reasonable grounds for believing that (i) the Corporation is, or would after the payment be, unable to pay its liabilities as
they become due, or (ii) the realizable value of the Corporation’s assets would thereby be less than the aggregate of its
liabilities and stated capital of its outstanding shares. No assurance can be given as to whether the Corporation will in the
future pay dividends, or the frequency or amounts of any such dividends.
Insufficiency of Insurance Coverage
While the Corporation maintains insurance coverage it believes would be maintained by a prudent owner/operator of similar
facilities or projects, there is no certainty that such insurance will continue to be offered on an economically feasible basis, nor
that all events that could give rise to a loss or liability are insurable or insured, nor that the amounts of insurance will be
sufficient to cover each and every loss or claim that may occur involving our activities or assets. Insurance coverage of project
assets and facilities may be prescribed by project financing agreements and/or PPAs. In addition, the Corporation may
undertake construction or pursue acquisitions where obtaining insurance may be difficult, not economically feasible or
otherwise insufficient to cover each and every loss or claim that may occur involving the new assets or activities. There are
certain elements of the Corporation’s business which are not insured, either as is customary in the industry, or where the cost
of coverage is not economically viable. Insurance policies are generally subject to annual review by the respective insurers
and there is no certainty that equivalent or more favourable terms will be offered upon each renewal. A significant loss, that is
uninsured or significantly exceeding the limits of insurance policies, or the failure to renew insurance policies on equivalent or
more favourable terms, could materially affect the Corporation’s business, including results of operations and cash flows, and
its reputation with customers, investors, lenders, regulators, governments and financial markets.
Litigation
In the normal course of its operations, the Corporation may become involved in various legal actions, including but not limited
to those involving claims relating to contract disputes, personal injuries, property damage, property taxes and land rights. The
Corporation maintains adequate provisions for its outstanding or pending claims. The final outcome with respect to
outstanding, pending or future actions cannot be predicted with certainty, and therefore there can be no assurance that their
resolution will not have an adverse effect on the financial position or results of operation of the Corporation in a particular
quarter or financial year.
Credit Rating May Not Reflect Actual Performance of the Corporation or a Lowering (Downgrade) of the
Credit Rating
The credit ratings applied to the Corporation, the Cumulative Rate Reset Preferred Shares, Series A and Cumulative
Redeemable Fixed Rate Preferred Shares, Series C (the “Credit Ratings”) are an assessment, by the rating agencies, of the
Corporation’s ability to pay its obligations. The Credit Ratings are based on certain assumptions about the future performance
and capital structure of the Corporation that may or may not reflect the actual performance or capital structure of the
Corporation. Changes in the Credit Ratings in the future may affect the market price or value and the liquidity of the securities
of the Corporation. There is no assurance that any Credit Ratings will remain in effect for any given period or that any rating
will not be lowered or withdrawn entirely by the rating agencies.
Revenues from Certain Facilities Will Vary Based on the Market (or Spot) Price of Electricity
Because the prices for electricity purchased from certain Operating Facilities vary based on the market price for electricity,
revenues from such facilities on the electricity market or under the applicable power purchase agreement will vary. An increase
in the volatility of spot price would add uncertainty to the determination of potential revenues and adjusted EBITDA and could
have an adverse impact on the Corporation’s results.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p80
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Host Country Economic, Social and Political Conditions
Several of the Corporation’s principal assets are located in foreign domiciles. Although the operating environments in these
jurisdictions are considered favourable compared to those in other countries, there are still economic, social and political risks
associated with operating in foreign jurisdictions. These risks include, but are not limited to, terrorism, hostage taking, war, civil
unrest or military repression, expropriation, repatriation or nationalization without adequate compensation, extreme fluctuations
in currency exchange rates, high rates of inflation and labour unrest, renegotiation or nullification of existing concessions,
licenses, permits and contracts, difficulties enforcing judgments in such jurisdictions, changes to tax, tariff and royalty regimes,
changes to environmental regulatory regimes, volatile local political, legal and economic climates, nepotism, subsidies directed
at industries competing with ours, difficulties obtaining key equipment and components for equipment, currency control and
host-country unfavourable legislation.
Host country economic, social and political uncertainty can arise as a result of a lack of support for our activities in local
communities in the vicinity of Innergex's properties. Changes in renewable resource, energy or investment policies or shifts in
political attitudes may also adversely affect the Corporation’s business. The effect of these factors cannot be accurately
predicted. Though the effects of competition will increase the likelihood of market efficiencies and benefit the Corporation's
properties, elimination of power cost subsidies may increase the inability of end-use consumers to pay for power and lead to
political opposition to privatization initiatives and have an adverse impact on Innergex's properties and operations.
Reliance on Intellectual Property and Confidentiality Agreements to Protect the Corporation's Rights and
Confidential Information
The Corporation’s success and competitive position are dependent in part upon its proprietary methods and intellectual
property. Although the Corporation seeks to protect its proprietary rights through a variety of means, it cannot guarantee that
the protective steps it has taken are adequate to protect these rights.
The Corporation also relies on confidentiality agreements with certain employees, consultants and other third parties to
protect, in part, trade secrets and other proprietary information. These agreements could be breached, and the Corporation
may not have adequate remedies for such a breach. In addition, others could independently develop substantially equivalent
proprietary information or gain access to the Corporation’s trade secrets or proprietary information.
Reputational Risks Arising from Misconduct of Representatives of the Corporation
The Corporation’s success can be impacted by events affecting its reputation. In some cases, the Corporation may be affected
or be held accountable for the actions of directors, officers or employees of the Corporation and those of third parties who act
for or on behalf of the Corporation. Although the Corporation seeks to protect its reputation through the Corporation's internal
policies, procedures and controls, there is a risk that events or actions of certain representatives of the Corporation could
affect its reputation. Adverse effects on the Corporation’s reputation could affect its relationships with various stakeholders,
partners, governments, employees, shareholders and the general public. This could, among other things, result in loss of
business opportunities, loss of revenue, litigation and a reduction in the Corporation’s ability to raise additional capital.
Reputational harm could also reduce the Corporation's ability to attract new talent or retain officers and key employees,
decrease social acceptance of renewable energy projects and affect government support to increase electricity to be
generated by independent power producers.
Ability to Attract New Talent or to Retain Officers or Key Employees
The Corporation’s officers and other key employees play a significant role in the Corporation’s success. The conduct of the
Corporation’s business and the execution of the Corporation’s growth strategy rely heavily on teamwork and the Corporation’s
future performance and development depend to a significant extent on the abilities, experience and efforts of its management
team. The Corporation’s ability to retain its management team or attract suitable replacements should key members of the
management team leave is dependent on the competitive nature of the employment market.
The loss of services from key members of the management team or a limitation in their availability could adversely impact the
Corporation’s prospects, financial condition and cash flow.
Further, such a loss could be negatively perceived in the capital markets. The Corporation’s success also depends largely
upon its continuing ability to attract, develop and retain skilled employees to meet its needs from time to time.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p81
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
10- FORWARD-LOOKING INFORMATION
To inform readers of the Corporation's future prospects, this MD&A contains forward-looking information within the meaning of
applicable securities laws (“Forward-Looking Information”), including the Corporation’s growth targets, power production,
prospective projects, successful development, construction and financing (including tax equity funding) of the projects under
construction and the advanced-stage prospective projects, sources and impact of funding, project acquisitions, execution of
project-level financing (including the timing and amount thereof), and strategic, operational and financial benefits and accretion
expected to result from such acquisitions, business strategy, future development and growth prospects, business integration,
governance, business outlook, objectives, plans and strategic priorities, and other statements that are not historical facts.
Forward-Looking Information can generally be identified by the use of words such as “approximately”, “may”, “will”, “could”,
“believes”, “expects”, “intends”, “should”, “would”, “plans”, “potential”, “project”, “anticipates”, “estimates”, “scheduled” or
“forecasts”, or other comparable terms that state that certain events will or will not occur. It represents the projections and
expectations of the Corporation relating to future events or results as of the date of this MD&A.
Future-Oriented Financial Information: Forward-Looking Information includes future-oriented financial information or
financial outlook within the meaning of securities laws, including information regarding the Corporation's targeted production,
the estimated targeted revenues and production tax credits, targeted Revenues and Production Tax Credits Proportionate,
targeted Adjusted EBITDA and targeted Adjusted EBITDA Proportionate, targeted Free Cash Flow, targeted Free Cash Flow
per Share and intention to pay dividend quarterly, the estimated project size, costs and schedule, including obtainment of
permits, start of construction, work conducted and start of commercial operation for Development Projects and Prospective
Projects, the Corporation's intent to submit projects under Requests for Proposals, the qualification of U.S. projects for PTCs
and ITCs and other statements that are not historical facts. Such information is intended to inform readers of the potential
financial impact of expected results, of the expected commissioning of Development Projects, of the potential financial impact
of completed and future acquisitions and of the Corporation's ability to pay a dividend and to fund its growth. Such information
may not be appropriate for other purposes.
Assumptions: Forward-Looking Information is based on certain key assumptions made by the Corporation, including, without
restriction, those concerning hydrology, wind regimes and solar irradiance; performance of operating facilities, acquisitions and
commissioned projects; availability of capital resources and timely performance by third parties of contractual obligations;
favourable economic and financial market conditions; average merchant spot prices consistent with external price curves and
internal forecasts; no material changes in the assumed U.S. dollar to Canadian dollar and Euro to Canadian dollar exchange
rate; no significant variability in interest rates; the Corporation’s success in developing and constructing new facilities; no
adverse political and regulatory intervention; successful renewal of PPAs; sufficient human resources to deliver service and
execute the capital plan; no significant event occurring outside the ordinary course of business such as a natural disaster,
pandemic or other calamity; continued maintenance of information technology infrastructure and no material breach of
cybersecurity.
Risks and Uncertainties: Forward-Looking Information involves risks and uncertainties that may cause actual results or
performance to be materially different from those expressed, implied or presented by the Forward-Looking Information. These
are referred to in the “Risks and Uncertainties” section of the Annual Report and include, without limitation: equipment supply;
global climate change: variability in hydrology, wind regimes and solar irradiance; global climate change: extreme weather
events; IT security risks and cyberattacks; increase in water rental cost or changes to regulations applicable to water use;
performance of major counterparties, delays, cost overruns; non compliance with project site regulatory requirements leading
to penalties, fines and other consequences; impact of failure to comply with project's environmental commitments or
requirements throughout project lifetime; equipment failure, unexpected operations and maintenance activity and increased
asset maintenance on ageing equipment; health and safety risks; availability and reliability of transmission systems; resource
assessment and performance variability; preparedness to facing natural disasters and force majeure; pandemics, epidemics or
other public health emergencies; inability to secure new profitable PPAs; inability to renew PPAs at adequately profitable
prices; failure to bring projects into commercial operation within contractually stipulated delay; regulatory and political risks;
risks related to U.S. production and investment tax credits, changes in U.S. corporate tax rates and availability of tax equity
financing; increases in operational cost and financial uncertainty surrounding development of new facilities; social acceptance
of renewable energy projects; inability to secure appropriate land; obtainment of permits; volatility of supply and demand in the
energy market; exposure to many different forms of taxation in various jurisdictions; purchaser's inability to fulfill contractual
obligations or refusal to accept delivery of power under power purchase agreements or power hedges; changes in
governmental support to increase electricity to be generated from renewable sources by independent power producers;
fluctuations affecting prospective power prices; relationships with Indigenous communities and stakeholders; inability of the
Corporation to execute its strategy for building shareholder value; inability to raise additional capital and the state of the capital
market; liquidity risks related to derivative financial instruments; interest rate fluctuations and refinancing; foreign exchange
fluctuations; changes in general economic conditions; financial leverage and restrictive covenants governing current and future
indebtedness; possibility that the Corporation may not declare a dividend or may reduce the amount of the dividend;
insufficiency of insurance coverage; litigation; credit rating may not reflect actual performance of the Corporation or a lowering
(downgrade) of the credit rating; revenues from certain facilities will vary based on the market (or spot) price of electricity; host
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p82
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
country economic, social and political conditions; reliance on intellectual property and confidentiality agreements to protect the
Corporation's rights and confidential information; reputational risks arising from misconduct of representatives of the
Corporation; and ability to attract new talent or to retain officers or key employees.
Although the Corporation believes that the expectations and assumptions on which Forward-Looking Information is based are
reasonable under the current circumstances, readers are cautioned not to rely unduly on this Forward-Looking Information, as
no assurance can be given that it will prove to be correct. Forward-Looking Information contained herein is provided as at the
date of this MD&A, and the Corporation does not undertake any obligation to update or revise any Forward-Looking
Information, whether as a result of events or circumstances occurring after the date hereof, unless so required by law.
Innergex Renewable Energy Inc.
Management's Discussion and Analysis p83
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Responsibility for Financial Reporting
The consolidated financial statements of Innergex Renewable Energy Inc. (the “Corporation”) and the management's
discussion and analysis and all of the information herein concerning the Corporation are the responsibility of Management.
These consolidated financial statements were prepared by Management in accordance with IFRS Accounting Standards as
issued by the IASB by applying the detailed accounting policies set out in the notes to the consolidated financial statements.
Management is of the opinion that the consolidated financial statements were prepared based on reasonable criteria and using
justifiable and reasonable estimates. The Corporation's financial information, presented elsewhere in the annual report, is
consistent with what is presented in the consolidated financial statements.
Management maintains efficient and high-quality internal accounting and management control systems while ensuring that
costs are reasonable. These systems provide assurance that the financial information is relevant, accurate and reliable, and
that the Corporation's assets are correctly accounted for and adequately safeguarded.
The Board of Directors of the Corporation is responsible for ensuring that Management fulfils its financial reporting
responsibilities. In addition, the Board of Directors is ultimately responsible for reviewing and approving the Corporation's
consolidated financial statements. The Board of Directors fulfils this responsibility through its Audit Committee.
The Audit Committee is appointed by the Board of Directors and all of its members are external non-related Directors.
The Audit Committee meets with Management and the independent auditor for the purposes of discussing internal controls
relating to the financial reporting process, audit of financial information and other financial issues, and to make sure that each
party is properly fulfilling its responsibilities. In addition, the Audit Committee reviews the annual report, the consolidated
financial statements and the independent auditors' report. The Audit Committee submits its findings to the Board of Directors
for review and for approval of the consolidated financial statements prior to their presentation to the shareholders. The Audit
Committee also determines whether to retain the services of an independent auditor and to renew their mandate, which is
subject to Board review and shareholders' approval.
These consolidated financial statements were approved by the Corporation's Board of Directors. The Corporation's
consolidated financial statements were audited by its independent auditor, KPMG LLP, in accordance with Canadian
generally accepted auditing standards and on the shareholders' behalf. KPMG LLP enjoys full and unrestricted access to
the Audit Committee.
[s] Michel Letellier
[s] Jean Trudel
Michel Letellier, MBA
Jean Trudel, MBA
President and Chief Executive Officer
Chief Financial Officer
Innergex Renewable Energy Inc.
Longueuil, Canada, February 20, 2025
Innergex Renewable Energy Inc.
Responsibility for Financial Reporting p84
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
KPMG LLP
Tour KPMG
600 de Maisonneuve Blvd West, Suite 1500
Montréal, QC H3A 0A3
Canada
Telephone 514 840 2100
Fax 514 840 2187
INDEPENDENT AUDITOR'S REPORT
To the Shareholders of Innergex Renewable Energy Inc.
Opinion
We have audited the consolidated financial statements of Innergex Renewable Energy Inc. (the "Entity"), which comprise:
•
the consolidated statements of financial position as at December 31, 2024 and December 31, 2023;
•
the consolidated statements of earnings (loss) for the years then ended;
•
the consolidated statements of comprehensive income (loss) for the years then ended;
•
the consolidated statements of changes in shareholders’ equity for the years then ended;
•
the consolidated statements of cash flows for the years then ended;
•
and notes to the consolidated financial statements, including a summary of material accounting policy information.
(Hereinafter referred to as the "financial statements").
In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated financial position
of the Entity as at December 31, 2024 and December 31, 2023, its consolidated financial performance and its consolidated
cash flows for the years then ended in accordance with IFRS Accounting Standards as issued by the International Accounting
Standards Board.
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those
standards are further described in the "Auditor’s Responsibilities for the Audit of the Financial Statements" section of our
auditor’s report.
We are independent of the Entity in accordance with the ethical requirements that are relevant to our audit of the financial
statements in Canada and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements for the year ended December 31, 2024. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
We have determined the matters described below to be the key audit matters to be communicated in our auditor’s report.
Innergex Renewable Energy Inc.
Independent Auditor's Report p85
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Evaluation of the impairment analysis for facilities subject to market price risk exposure
Description of the matter
We draw attention to Notes 2, 3, 13, 14 and 16 to the financial statements. The Entity has property, plant and equipment of
$7,032,301, intangible assets of $1,175,515 and goodwill of $138,766, and recorded an impairment charge of $44,567 during
the year ended December 31, 2024. A portion of these non-financial assets are related to facilities that are subject to market
price risk exposure.
At the end of each reporting period, the Entity reviews the carrying amounts of its non-financial assets, other than goodwill, to
determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset or
cash-generating unit ("CGU") is estimated. If the recoverable amount of an asset or CGU is lower than its carrying amount, the
carrying amount is reduced to its recoverable amount. An impairment loss is recognized immediately in earnings (loss).
Recoverable amount is the greater of fair value less costs to sell and value in use. In assessing the recoverable amount, the
estimated future cash flows are discounted by the Entity to their present value using a discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset or CGU.
Future cash flows may be influenced by a number of the Entity’s significant assumptions, such as discount rates and
forecasted production and selling prices.
Why the matter is a key audit matter
We identified the evaluation of impairment analysis for facilities subject to market price risk exposure as a key audit matter.
This matter represented an area of significant risk of material misstatement given the magnitude of such non-financial assets
and the high degree of estimation uncertainty in determining the recoverable amount. In addition, significant auditor judgement
and specialized skills and knowledge were required in evaluating the results of our audit procedures due to the sensitivity of
the Entity’s determination of recoverable amount to minor changes to significant assumptions.
How the matter was addressed in the audit
The primary procedures we performed to address this key audit matter included the following:
We evaluated the appropriateness of the Entity’s significant assumptions:
•
For forecasted production by comparing to historical trends and third-party forecasts specific to the facilities.
•
For forecasted selling price assumptions by comparing to third party industry forecasts specific to the regions.
We involved valuation professionals with specialized skills and knowledge, who assisted in evaluating the appropriateness of
the Entity’s discount rates assumptions by comparing the inputs into the discount rates to publicly available market data for
comparable entities.
Innergex Renewable Energy Inc.
Independent Auditor's Report p86
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Other Information
Management is responsible for the other information. The other information comprises:
•
The information included in Management’s Discussion and Analysis filed with the relevant Canadian Securities
Commissions.
•
The information, other than the financial statements and the auditor’s report thereon, included in a document likely to be
entitled "2024 Annual Report".
Our opinion on the financial statements does not cover the other information and we do not, and will not, express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information identified above and,
in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit and remain alert for indications that the other information appears to be materially misstated.
We obtained the information included in Management’s Discussion and Analysis filed with the relevant Canadian Securities
Commissions and the information, other than the financial statements and the auditor’s report thereon, included in a document
likely to be entitled "2024 Annual Report" as at the date of this auditor’s report.
If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this
other information, we are required to report that fact in the auditor’s report.
We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS
Accounting Standards as issued by the International Accounting Standards Board, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Entity's ability to continue as a going
concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Entity or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Entity's financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
Canadian generally accepted auditing standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment
and maintain professional skepticism throughout the audit.
Innergex Renewable Energy Inc.
Independent Auditor's Report p87
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
We also:
•
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
•
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity's internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
•
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the Entity's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Entity to cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
•
Communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
•
Provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
•
Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business units within the group as a basis for forming an opinion on the group financial statements. We are
responsible for the direction, supervision and review of the audit work performed for the purposes of the group audit. We
remain solely responsible for our audit opinion.
•
Determine, from the matters communicated with those charged with governance, those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our auditor’s report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.
The engagement partner on the audit resulting in this auditor’s report is Mathieu Lefebvre.
Montréal, Canada
February 20, 2025
*CPA auditor, public accountancy permit No. A134987
Innergex Renewable Energy Inc.
Independent Auditor's Report p88
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Year ended December 31
2024
2023
Notes
Revenues
952,453
969,890
Production tax credits
94,724
71,684
Revenues and production tax credits
1,047,177
1,041,574
Expenses
Operating
4
233,693
232,795
General and administrative
4
68,393
69,242
Prospective projects
4
38,747
27,162
ERP implementation
4
7,574
12,651
Depreciation and amortization
13, 14
380,676
361,292
Impairment of long-term assets
13, 16
44,567
118,857
Operating income
273,527
219,575
Finance costs
5
340,895
348,386
Other net (income) expenses
6
(3,399)
27,031
Share of earnings of joint ventures and associates
7
(15,209)
(16,791)
Change in fair value of financial instruments
8 b)
(32,955)
13,676
Loss before income tax
(15,805)
(152,727)
Income tax recovery
9
(42,292)
(46,913)
Net earnings (loss)
26,487
(105,814)
Net earnings (loss) attributable to:
Owners of the parent
15,893
(98,451)
Non-controlling interests
24
10,594
(7,363)
26,487
(105,814)
Net earnings (loss) per share attributable to owners:
Basic net earnings (loss) per share ($)
10
0.05
(0.51)
Diluted net earnings (loss) per share ($)
10
0.05
(0.51)
The accompanying notes are an integral part of these audited consolidated financial statements.
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
Innergex Renewable Energy Inc.
Consolidated Statements of Earnings (loss) p89
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Year ended December 31
2024
2023
Notes
Net earnings (loss)
26,487
(105,814)
Items of comprehensive income (loss) that will be subsequently
reclassified to earnings:
Foreign currency translation differences for foreign operations
22
128,900
(27,705)
Change in fair value of financial instruments designated as net
investment hedges
8 a), 22
(3,624)
(4,530)
Change in fair value of financial instruments designated as cash
flow hedges
8 a), 22
(25,095)
(41,792)
Change in fair value of financial instruments of joint ventures and
associates designated as cash flow hedges
7, 22
(1,111)
(3,705)
Related deferred income tax
22
5,353
10,168
Other comprehensive income (loss)
104,423
(67,564)
Total comprehensive income (loss)
130,910
(173,378)
Total comprehensive income (loss) attributable to:
Owners of the parent
94,651
(160,337)
Non-controlling interests
36,259
(13,041)
130,910
(173,378)
The accompanying notes are an integral part of these audited consolidated financial statements.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Innergex Renewable Energy Inc.
Consolidated Statements of Comprehensive Income (Loss) p90
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
As at
December 31, 2024
December 31, 2023
Notes
ASSETS
Current assets
Cash and cash equivalents
181,280
159,244
Restricted cash
11
37,863
40,099
Accounts receivable
12
232,690
232,694
Derivative financial instruments
8 a)
17,230
38,017
Tax credits recoverable
13
80,464
—
Prepaids and other
30,722
48,052
Total current assets
580,249
518,106
Non-current assets
Property, plant and equipment
13
7,032,301
6,560,814
Intangible assets
14
1,175,515
1,273,059
Project development costs
15
42,615
34,255
Investments in joint ventures and associates
7
128,091
130,009
Derivative financial instruments
8 a)
63,013
63,689
Deferred tax assets
9
163,073
87,860
Goodwill
16
138,766
176,608
Other long-term assets
17
117,677
95,426
Total non-current assets
8,861,051
8,421,720
Total assets
9,441,300
8,939,826
LIABILITIES
Current liabilities
Accounts payable and other payables
18
274,709
280,382
Derivative financial instruments
8 a)
296
30,780
Current portion of long-term loans and borrowings and other
liabilities
19, 20
641,913
255,285
Total current liabilities
916,918
566,447
Non-current liabilities
Derivative financial instruments
8 a)
12,512
66,610
Long-term loans and borrowings
19
5,958,326
6,032,269
Other liabilities
20
551,649
540,550
Deferred tax liabilities
9
483,223
528,622
Total non-current liabilities
7,005,710
7,168,051
Total liabilities
7,922,628
7,734,498
SHAREHOLDERS' EQUITY
Equity attributable to owners
1,125,638
1,086,883
Non-controlling interests
24
393,034
118,445
Total shareholders’ equity
1,518,672
1,205,328
Total liabilities and shareholders’ equity
9,441,300
8,939,826
The accompanying notes are an integral part of these audited consolidated financial statements.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Innergex Renewable Energy Inc.
Consolidated Statements of Financial Position p91
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Equity attributable to owners
Year ended December 31, 2024
Common
share capital
account
Contributed
surplus
Preferred
shares
Convertible
debentures
Deficit
Accumulated
other
comprehensive
Income
Total
Non-
controlling
interests
Total
shareholders’
equity
Balance January 1, 2024
1,267 2,582,968
131,069
2,819 (1,764,130)
132,890 1,086,883
118,445 1,205,328
Net earnings
—
—
—
—
15,893
—
15,893
10,594
26,487
Other comprehensive income
—
—
—
—
—
78,758
78,758
25,665
104,423
Total comprehensive income
—
—
—
—
15,893
78,758
94,651
36,259
130,910
Shares issued through dividend reinvestment plan
742
—
—
—
—
—
742
—
742
Buyback of common shares (Note 21)
—
(10,220)
—
—
—
—
(10,220)
—
(10,220)
Share-based payments and Performance Share Plan
—
2,722
—
—
—
—
2,722
—
2,722
Shares purchased - Performance Share Plan
—
(4,633)
—
—
—
—
(4,633)
—
(4,633)
Investments from non-controlling interests (Note 24)
—
—
—
—
45,725
(11,381)
34,344
280,428
314,772
Dividends declared on common shares (Note 21)
—
—
—
—
(73,219)
—
(73,219)
—
(73,219)
Dividends declared on preferred shares (Note 21)
—
—
—
—
(5,632)
—
(5,632)
—
(5,632)
Distributions to non-controlling interests
—
—
—
—
—
—
—
(42,098)
(42,098)
Balance December 31, 2024
2,009 2,570,837
131,069
2,819 (1,781,363)
200,267 1,125,638
393,034 1,518,672
The accompanying notes are an integral part of these audited consolidated financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
Innergex Renewable Energy Inc.
Consolidated Statements of Changes in Shareholders' Equity p92
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Equity attributable to owners
Year ended December 31, 2023
Common
shares
capital
account
Contributed
surplus
Preferred
shares
Convertible
debentures
Deficit
Accumulated
other
comprehensive
(loss) income
Total
Non-
controlling
interests
Total
shareholders’
equity
Balance January 1, 2023
485 2,581,173 131,069
2,819 (1,596,021)
196,670 1,316,195 170,232
1,486,427
Net loss
—
—
—
—
(98,451)
—
(98,451)
(7,363)
(105,814)
Other comprehensive loss
—
—
—
—
—
(61,886)
(61,886)
(5,678)
(67,564)
Total comprehensive loss
—
—
—
—
(98,451)
(61,886) (160,337)
(13,041)
(173,378)
Shares issued through dividend reinvestment plan
2,541
—
—
—
—
—
2,541
—
2,541
Reduction of capital on common shares
(1,103)
1,103
—
—
—
—
—
—
—
Share-based payments and Performance Share Plan
—
3,274
—
—
—
—
3,274
—
3,274
Business dispositions
—
—
—
—
—
—
—
119
119
Shares vested - Performance Share Plan
1,991
(3,041)
—
—
—
—
(1,050)
—
(1,050)
Shares purchased - Performance Share Plan
(2,647)
459
—
—
—
—
(2,188)
—
(2,188)
Investments from non-controlling interests
—
—
—
—
88,500
(2,226)
86,274
5,792
92,066
Buyback of non-controlling interests
—
—
—
—
(5,468)
332
(5,136)
(2,298)
(7,434)
Dividends declared on common shares
—
—
—
—
(147,058)
— (147,058)
—
(147,058)
Dividends declared on preferred shares
—
—
—
—
(5,632)
—
(5,632)
—
(5,632)
Distributions to non-controlling interests
—
—
—
—
—
—
—
(42,359)
(42,359)
Balance December 31, 2023
1,267 2,582,968 131,069
2,819 (1,764,130)
132,890 1,086,883 118,445
1,205,328
The accompanying notes are an integral part of these audited consolidated financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
Innergex Renewable Energy Inc.
Consolidated Statements of Changes in Shareholders' Equity p93
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Year ended December 31
2024
2023
OPERATING ACTIVITIES
Notes
Net earnings (loss)
26,487
(105,814)
Items not affecting cash:
Depreciation and amortization
13, 14
380,676
361,292
Impairment of long-term assets
13, 16
44,567
118,857
Share of earnings of joint ventures and associates
7
(15,209)
(16,791)
Unrealized portion of change in fair value of financial instruments
8 b)
(87,137)
(9,649)
Production tax credits and tax attributes allocated to tax equity
investors
(71,593)
(73,460)
Change in fair value of contingent considerations
20
—
25,563
Other
219
587
Finance costs
5
340,895
348,386
Finance costs paid
23 b)
(277,555)
(284,387)
Distributions received from joint ventures and associates
7
16,044
18,930
Income tax recovery
9
(42,292)
(46,913)
Income tax paid
(5,289)
(5,929)
Effect of exchange rate fluctuations
(775)
582
309,038
331,254
Changes in non-cash operating items
23 a)
(16,873)
(33,401)
292,165
297,853
FINANCING ACTIVITIES
Dividends paid on common and preferred shares
(96,604)
(150,114)
Distributions to non-controlling interests
(42,098)
(42,359)
Investments from non-controlling interests
24
248,755
99,759
Increase in long-term debt, net of deferred financing costs
23 c)
1,017,604
1,469,145
Repayment of long-term debt
23 c)
(944,570)
(1,025,345)
Buyback of non-controlling interests
—
(7,434)
Payment of other liabilities
20
(6,465)
(7,135)
Payment for buyback of common shares
(10,220)
—
Purchase of common shares under the Performance Share Plan
(4,633)
(2,188)
Payment of payroll withholding on exercise of stock options and
Performance Share Plan
—
(1,050)
161,769
333,279
INVESTING ACTIVITIES
Business acquisitions, net of cash acquired
—
(47,810)
Change in restricted cash
5,906
17,528
Additions to property, plant and equipment, net
(431,644)
(685,089)
Additions to intangible assets
(4,555)
(2,113)
Additions to project development costs
(3,964)
(8,488)
Proceeds from BESS supply agreements termination payments
15
—
18,159
Proceeds from disposition of assets held for sale
—
59,426
Other
(3,959)
14,678
(438,216)
(633,709)
Effects of exchange rate changes on cash and cash equivalents
6,318
(1,150)
Net change in cash and cash equivalents
22,036
(3,727)
Cash and cash equivalents, beginning of year
159,244
162,971
Cash and cash equivalents, end of year
181,280
159,244
Additional information is presented in Note 23 – Additional Information to the Consolidated Statements of Cash Flows.
The accompanying notes are an integral part of these audited consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Innergex Renewable Energy Inc.
Consolidated Statements of Cash Flows p94
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
DESCRIPTION OF BUSINESS
Innergex Renewable Energy Inc. (“Innergex” or the “Corporation”) was incorporated under the Canada Business Corporation
Act on October 25, 2002, and its shares and convertible debentures are listed on the Toronto Stock Exchange. The
Corporation is a developer, acquirer, owner and operator of renewable power-generating and energy storage facilities,
essentially focused on the hydroelectric, wind and solar power sectors. The Corporation's head office is located at
1225 St-Charles Street West, 10th floor, Longueuil, QC, J4K 0B9, Canada.
These consolidated financial statements were approved by the Board of Directors on February 20, 2025.
1.
BASIS OF PRESENTATION AND STATEMENT OF COMPLIANCE
Statement of Compliance
These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards (“IFRS”),
as issued by the International Accounting Standards Board (“IASB”). The Corporation’s material accounting policies are
described in Note 2. These policies have been consistently applied to all years presented, unless otherwise stated.
Basis of Measurement
The consolidated financial statements have been prepared on a historical cost basis, except for certain financial
instruments and assets and liabilities acquired in business combinations that are measured at fair value. Historical cost
is generally based on the fair value of the consideration given in exchange.
Functional Currency and Presentation Currency
These consolidated financial statements are presented in Canadian dollars, which is the Corporation’s functional
currency.
2.
MATERIAL ACCOUNTING POLICIES
Principles of consolidation
The consolidated financial statements include the accounts of the Corporation, and the subsidiaries that it controls.
Control exists when the Corporation has the power over the subsidiary, when it is exposed or has rights to variable
returns from its involvement with the subsidiary and when it has the ability to use its power to affect its returns.
Subsidiaries that the Corporation controls are consolidated from the effective date of acquisition up to the effective date
of disposition or loss of control.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p95
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Details of the Corporation's significant subsidiaries at the end of the reporting period are set out below.
Name of subsidiaries
Principal activity
Place of
creation and
operation
Proportion of
ownership interest
and voting rights
held by the
Corporation
Upper Lillooet Limited Partnership
Own and operate a hydroelectric facility
Canada
100.00%
Innergex Inc.
Own and operate hydroelectric and wind
facilities
Canada
100.00%
Big Silver Creek Power Limited
Partnership
Own and operate a hydroelectric facility
Canada
100.00%
Innergex Cartier Energy LP
Own and operate wind facilities
Canada
100.00%
Innergex SSMarie Holdco LP
Own and operate a solar facility
Canada
100.00%
Harrison Hydro L.P., and its
subsidiaries1
Own and operate hydroelectric facilities
Canada
50.01%
Mesgi'g Ugju's'n (MU) Wind Farm L.P.1
Own and operate a wind facility
Canada
50.00%
Mountain Air Alternatives LLC, and its
subsidiaries
Own and operate wind facilities
United States
100.00%
Foard City Holdings, LLC
Own and operate a wind facility
United States
77.80%
Phoebe Energy Project, LLC1
Own and operate a solar facility
United States
50.01%
Hillcrest Solar I, LLC
Own and operate a solar facility
United States
100.00%
Griffin Trail Wind, LLC1
Own and operate a wind facility
United States
50.01%
Innergex HQI USA LLC1
Own and operate hydroelectric facilities
United States
50.00%
Boswell Wind, LLC
Own and operate a wind facility
United States
100.00%
Innergex France S.A.S.
Own and operate wind facilities
France
70.00%
Aela Generación S.A., and its
subsidiaries
Own and operate hydroelectric, wind
and solar facilities
Chile
100.00%
1.
Based on the terms of agreements under which these entities were established, the Corporation is exposed to, and has right to,
variable returns from its involvement with the investee, and has the current ability to direct these entities's activities that most
significantly affect the returns.
Investments in joint ventures and associates
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the
net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which
exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
An associate is an entity in which the Corporation has significant influence, but not control, over the financial and
operating policies. Significant influence is presumed to exist when the Corporation holds between 20% and 50% of the
voting power of another entity.
The determination of whether the Corporation has control, joint control or significant influence over an investee requires
the Corporation to make assumptions and critical judgments in evaluating the classification requirements.
The earnings, and assets and liabilities of joint ventures and associates are incorporated in these consolidated financial
statements using the equity method of accounting. Under the equity method, an investment in a joint venture or an
associate is initially recognized in the consolidated statement of financial position at cost and adjusted thereafter to
recognize the Corporation's share of the earnings (loss) and other comprehensive income (loss) of the joint venture or
associate. When the Corporation's share of losses of a joint venture or an associate exceeds the Corporation's interest
in that joint venture or associate (which includes any long-term interest that, in substance, forms part of the
Corporation's net investment in the joint venture), the Corporation discontinues recognizing its share of further losses.
Additional losses are recognized only to the extent that the Corporation has incurred legal or constructive obligations or
made payments on behalf of the joint venture or the associate.
An investment is accounted for using the equity method from the date on which the investee becomes a joint venture or
an associate. On acquisition of the investment in a joint venture or associate, any excess of the cost of the investment
over the Corporation's share of the fair value of the identifiable assets and liabilities of the investee is recognized as
goodwill, which is included within the carrying amount of the investment. Any excess of the Corporation's share of the
net fair value of the identifiable assets and liabilities over the cost of the investment, after reassessment, is recognized
immediately in earnings (loss).
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p96
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
At the end of each reporting period, the Corporation reviews the carrying amounts of its investments in joint ventures
and associates to determine whether there is any indication of impairment. If any such indication exists, the recoverable
amount of the net investment is estimated. Because goodwill that forms part of the carrying amount of a net investment
in an associate or a joint venture is not separately recognized, it is not tested for impairment separately by applying the
requirements for impairment testing of goodwill. Instead, the entire carrying amount of the investment is tested for
impairment as a single asset, by comparing its recoverable amount (higher of value in use and fair value less costs to
sell) with its carrying amount. Any impairment loss recognised in those circumstances forms part of the carrying amount
of the net investment in the associate or joint venture and is not allocated to any asset, including goodwill. Accordingly,
any reversal of that impairment loss is recognised to the extent that the recoverable amount of the net investment
subsequently increases.
Business combinations
Business combinations are accounted for using the acquisition method. The consideration transferred is measured at
the aggregate of the fair values, at the acquisition date, of assets transferred, liabilities incurred or assumed, and equity
instruments issued by the Corporation in exchange for control of the acquiree. Where appropriate, the consideration
transferred includes any asset or liability resulting from a contingent consideration arrangement, measured at its
acquisition-date fair value. Subsequent changes in such fair values are adjusted against the consideration transferred
when they qualify as measurement period adjustments. All other subsequent changes in the fair value of contingent
consideration classified as an asset or liability are accounted for in accordance with the relevant IFRS and reflected
through net earnings. Changes in the fair value of contingent consideration classified as equity are not recognized.
Identifiable assets acquired, as well as liabilities and contingent liabilities assumed in a business combination, are
measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interests
("NCI"). The excess of the aggregate of consideration transferred, the amount of any NCI, and in a business
combination achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the
acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill in the consolidated statement
of financial position. Any negative goodwill is recognized directly in the consolidated statements of earnings (loss).
Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Corporation's
equity therein. The interest of non-controlling shareholders may be initially measured either at fair value or at the non-
controlling interest's proportionate share in the recognized amounts of the acquiree's identifiable net assets. The choice
of measurement basis is made on an acquisition by acquisition basis.
Property, plant and equipment
Property, plant and equipment are comprised mainly of hydroelectric, wind farm, solar and storage facilities that are
either in operation or under construction. They are recorded at cost less accumulated depreciation and accumulated
impairment losses, if any.
Property, plant and equipment are depreciated on a straight-line basis over the lesser of (i) the estimated useful lives of
the assets or (ii) the period for which the Corporation owns the rights to the assets. Improvements that increase or
extend the service life or capacity of an asset are capitalized. Maintenance and repair costs are expensed as incurred.
Property, plant and equipment are not depreciated until they are ready for their intended use.
The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period,
with the effect of any changes in estimate accounted for on a prospective basis.
An item of property, plant and equipment is derecognized upon disposition or when no future economic benefits are
expected to arise from the continued use of the asset. Any gain or loss arising on the disposition or retirement of an item
of property, plant and equipment is determined as the difference between the sale proceeds and the carrying amount of
the asset and is recognized in earnings (loss).
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets
that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of
those assets, until such time as the assets are substantially ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying
assets is deducted from the borrowing costs eligible for capitalization.
All other borrowing costs are recognized in earnings (loss) in the period in which they are incurred.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p97
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
The useful lives used to calculate depreciation are summarized as follows:
Type of property, plant and equipment
Useful life for the
depreciation period
Hydroelectric facilities
8 to 75 years
Wind farm facilities
14 to 30 years
Solar facilities
15 to 35 years
Other equipments
3 to 20 years
Leases
Nature of leasing activities
The Corporation typically leases land and offices. Lease agreements are generally made for fixed long-term periods
based on each project's estimated lives at inception. Land leases for a given project are usually negotiated jointly, with
governments for government-owned land, or directly with groups of private landowners for privately-owned land. Office
and other leases are negotiated on an individual basis and contain a wide range of different terms and conditions. Being
negotiated for long-term periods, most land leases provide for additional payments based on changes in inflation. In
addition, leases generally include an option to renew the lease for an additional period after the non-cancellable
contract period. The Corporation assesses at lease commencement whether it is reasonably certain to exercise the
extension options. Generally, the Corporation aligns lease extension option renewals with the estimated life of projects.
Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset
is available for use by the Corporation. Each lease payment is allocated between the lease liability and finance costs.
The finance costs are charged to earnings or loss over the lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each period.
(i)
Lease liabilities
Lease liabilities are recognized in other liabilities in the consolidated statement of financial position at the present value
of the future lease payments, discounted using the interest rate implicit in the lease. If that rate cannot be determined,
the lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds
necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions. When
determining the amount of the future lease payments, the Corporation takes the following information into account:
◦
fixed payments, including in-substance fixed payments, less any lease incentives receivable; and
◦
variable lease payments that are based on an index or a rate;
Payments associated with short-term leases and leases of low-value assets are recognized on a straight-line basis as
an expense in earnings or loss. Short-term leases correspond to lease agreements with a term of 12 months or less.
Lease liabilities are subsequently measured at amortized cost using the effective interest method. A remeasurement of
the lease liabilities occur when there is a change in future lease payments arising from a variation in the relevant index
or rate.
(ii)
Right-of-use assets
Right-of-use assets are recognized in property, plant and equipment in the consolidated statement of financial position
at cost, comprising the amount of the initial measurement of the lease liability, any lease payments made at or before
the commencement date and any initial direct costs.
Right-of-use assets are subsequently depreciated on a straight-line basis over the lesser of (i) the estimated useful lives
of the assets or (ii) the lease term, including, when it is reasonably certain that they will be exercised, options to extend
the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property,
plant and equipment.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p98
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Intangible assets
Intangible assets consist of various power purchase agreements, permits, licenses and agreements. Intangible assets
are amortized using the straight-line method over a period ending on the maturity date of the power purchase
agreements, permits, licenses or agreements of each facility. They are recorded at cost less accumulated amortization
and accumulated impairment losses. Amortization starts when the related facility becomes ready for its intended use.
The Corporation recognizes an intangible asset arising from a service concession arrangement when it has the right to
charge for usage of the concession infrastructure. An intangible asset received as consideration for providing
construction or upgrade services in a service concession arrangement is measured at fair value upon initial recognition.
Subsequent to initial recognition, the intangible asset is measured at cost, which includes capitalized borrowing costs,
less accumulated amortization and accumulated impairment losses.
Intangible assets related to facilities under construction are not amortized until the related facilities are ready for their
intended use.
The estimated useful lives and amortization methods are reviewed at the end of each reporting period, with the effect of
any changes in estimates being accounted for on a prospective basis.
The useful lives used to calculate amortization are as follows:
Intangible assets related to:
Useful life for the
amortization period
Hydroelectric facilities
4 to 75 years
Wind farm facilities
8 to 20 years
Solar facilities
20 years
Project development costs
Project development costs are recorded at cost less any impairment losses, as applicable, and represent costs incurred
for the acquisition of prospective projects and for the design and development of hydroelectric, wind farm and solar
sites. Borrowing costs directly attributable to the acquisition or development are capitalized as project development
costs.
The Corporation defers project development costs when it becomes probable that the project will be completed and that
it will generate future economic benefits that will flow to the Corporation. The Corporation makes this determination by
taking into consideration various factors, either individually or combined, such as (amongst others):
•
whether a project has been granted, or whether it is probable that it will be granted, the required permits;
•
rights of access to the required land have been secured or it is probable that they will be secured;
•
the announcement, or the probability thereto, that a prospective project is awarded a power purchase agreement;
and
•
access to an open market if the project is not in a market where it is expected to be awarded a power purchase
agreement.
These costs are transferred to property, plant and equipment or intangible assets at the commencement of construction.
When it is no longer probable that a project will be carried out, the project's development costs deferred to that date are
expensed. Current costs for prospective projects are expensed as incurred.
Impairment of property, plant and equipment, intangible assets and project development costs other than
goodwill
At the end of each reporting period, the Corporation reviews the carrying amounts of its non-financial assets, other than
goodwill, to determine whether there is any indication of impairment. If any such indication exists, the recoverable
amount of the asset is estimated. Where it is not possible to estimate the recoverable amount of an individual asset,
assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are
largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”, or “CGU”).
Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to
individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which
a reasonable and consistent allocation basis can be identified.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p99
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an
indication that the asset may be impaired.
Recoverable amount is the greater of fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset or CGU.
If the recoverable amount of an asset or CGU is lower than its carrying amount, the carrying amount is reduced to its
recoverable amount. An impairment loss is recognized immediately in earnings (loss).
Where an impairment loss subsequently reverses, the carrying amount of the asset or CGU is increased to the revised
recoverable amount, to the extent that the carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognized. A reversal of an impairment loss is recognized immediately in
earnings (loss).
Goodwill
Goodwill arises during business combinations and is measured at the acquisition date. It is subsequently measured at
cost, less accumulated impairment losses (if any).
For purposes of impairment testing, goodwill is allocated to each of the Corporation's CGU (or groups of CGUs) that is
expected to benefit from the synergies of the combination.
A CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is
indication that the CGU may be impaired. If the recoverable amount of the CGU is less than its carrying amount, the
impairment loss is allocated first to reduce the goodwill allocated to the CGU and then, to reduce the carrying amounts
of the other assets in the CGU on a pro-rata basis. Any impairment loss is recognized in earnings (loss). An impairment
loss recognized for goodwill is not reversed in subsequent periods.
Provisions and asset retirement obligations
A provision is a liability of uncertain timing or amount. Provisions are recognized into other liabilities when the
Corporation has a present obligation (legal or constructive) as a result of a past event, it is probable that the Corporation
will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. A legal
obligation can arise through a contract, legislation, or other operation of law. A constructive obligation arises from an
entity's actions whereby, through an established pattern of past practice, published policies or a sufficiently specific
current statement, the entity has indicated that it will accept certain responsibilities and has thus created a valid
expectation that it will discharge those responsibilities. The amount recognized as a provision is the best estimate, at
each period end, of the expenditures required to settle the present obligation considering the risks and uncertainties
associated with the obligation. Where expenditures are expected to be incurred in the future, the obligation is measured
at its present value using a current market-based, risk-adjusted interest rate.
Asset retirement obligations are recorded in other liabilities when those obligations are incurred and are measured at
the present value, if a reasonable estimate of the expected costs to settle the liability can be determined, discounted at
a current pre-tax rate specific to the liability. In subsequent periods, the liability is adjusted for changes resulting from
the passage of time and revisions to either the timing or the amount of the original estimate of the undiscounted cash
flows or changes in the discount rate. The accretion of the liability as a result of the passage of time is charged to
earnings while changes resulting from the revisions to either the timing, the amount of the original estimate of the
undiscounted cash flows or a change of the discount rate are accounted for as part of the carrying amount of the related
property, plant and equipment. The carrying amount of the asset retirement obligations is reviewed at each quarter-end
to reflect current estimates and changes in the discount rate.
Financial instruments
The Corporation initially recognizes financial assets on the trade date at which the Corporation becomes a party to the
contractual provisions of the instrument.
Financial assets are initially measured at fair value. If the financial asset is not subsequently accounted for at fair value
through earnings (loss), then the initial measurement includes transaction costs that are directly attributable to the
asset’s acquisition or origination. On initial recognition, the Corporation classifies its financial assets as subsequently
measured at either amortized cost or fair value, depending on its business model for managing the financial assets and
the contractual cash flow characteristics of the financial assets.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p100
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
The Corporation currently classifies its cash and cash equivalents, restricted cash, accounts receivable, tax credits
recoverable and reserve accounts recognized in other long-term assets as financial assets measured at amortized cost.
(i)
Financial assets measured at fair value
These assets are measured at fair value and changes therein, including any interest or dividend income, are
recognized in net earnings unless hedge accounting is used in which case the changes are recognized in other
comprehensive income.
The Corporation currently classifies its derivative financial instruments as financial assets measured at fair value.
Financial liabilities are classified into the following categories:
(i)
Financial liabilities measured at amortized cost
Non-derivative financial liabilities are initially recognized at fair value less any directly attributable transaction costs.
Subsequent to initial recognition, these liabilities are measured at amortized cost using the effective interest
method.
The Corporation currently classifies its accounts payable and other payables, long-term loans and borrowings and
its tax equity liabilities as liabilities measured at amortized cost.
Tax equity liabilities
The Corporation owns and operates certain projects in the U.S. under tax equity structures to finance the
construction of solar and wind projects. Such structures are designed to allocate renewable tax incentives, such as
investment tax credits ("ITCs"), production tax credits ("PTCs") and accelerated tax depreciation, to tax equity
investors. Generally, tax equity structures grant the tax equity investors the majority of the project's U.S. taxable
earnings and renewable tax incentives, along with a smaller portion of the projects' cash flows, until they achieve
an agreed-upon after-tax investment return (the "Flip Point"). The Flip Point dates are generally dependent on the
projects' respective performance. However, from time to time, the Flip Point dates may be contractually determined.
Subsequent to the Flip Point, the Corporation receives the majority of the project's taxable earnings and renewable
tax incentives.
When a tax equity partnership is formed, the Corporation assesses whether the project company should be
consolidated based on the Corporation's right to variable returns and its ability to influence financial and operational
decisions impacting those returns. Due to the operational and financial nature of the projects, and the protective
nature of the rights normally given to tax equity investors, the Corporation typically has the influence to consolidate
the entity.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p101
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
The terms of the tax equity partner's contribution are evaluated to determine the accounting treatment. The
contribution generally has the characteristics of a liability as the initial contribution is repaid, including an agreed
upon return, and the partner does not share in the risks of the project in the same way as a shareholder. As such,
the contribution is accounted for as loans and borrowings on the consolidated statements of financial position and
measured at amortized cost until the Flip date of the project. The amortized cost of the tax equity financing is
generally comprised of the following elements:
Elements affecting amortized cost of the tax equity financing
Description
Production tax credits ("PTC")
Allocation of PTCs to the tax equity investor derived
from the power generated during the period and
recognized in revenues and production tax credits
as earned and as a reduction in tax equity financing
Investment tax credits ("ITC")
Allocation of ITCs to the tax equity investor
stemming from the construction activities and
recognized as a reduction in both the cost of the
assets to which they relate and the tax equity
financing
Taxable income (loss), including tax attributes such as
accelerated tax depreciation
Allocation of taxable income and other tax attributes
to the tax equity investor recognized in other net
income as earned and as a reduction in tax equity
financing
Interest expense
Interest expense using the effective interest rate
method recognized in finance costs as incurred and
as an increase in tax equity financing
Pay-go contributions
Additional cash contributions made by the tax
equity investor when the annual production exceeds
the contractually determined threshold, as an
increase in tax equity financing
Cash distributions
Cash allocation to the tax equity investor,
recognized as a reduction in tax equity financing
Subsequent to the Flip Point, the tax equity partner will share in the risks and rewards in the project as a
shareholder and will be accounted for as a non-controlling interest.
(ii)
Financial liabilities measured at fair value
Financial liabilities at fair value are initially recognized at fair value and are re-measured at each reporting date with
any changes therein recognized in net earnings unless hedge accounting is used in which case the changes are
recognized in other comprehensive income.
The Corporation currently classifies its derivative financial instruments and contingent considerations payable as
financial liabilities measured at fair value.
The Corporation derecognizes a financial liability when its contractual obligations are discharged, cancelled or expired.
Financial instruments are classified in fair value hierarchy levels as follows:
Level 1: valuation based on quoted prices (unadjusted) in active markets to which the entity has access at the
evaluation date for identical assets or liabilities;
Level 2: valuation techniques based on inputs other than quoted prices included in Level 1 that are observable for
the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices);
Level 3: valuation techniques using inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
The fair value hierarchy requires the use of observable market inputs whenever such inputs exist. A financial instrument
is classified to the lowest level of the hierarchy for which a significant input has been considered in measuring fair value.
The Corporation recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during
which the change has occurred.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p102
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Hedging relationships
The Corporation enters into derivative financial instruments to hedge its market risk exposures. On initial designation of
new hedges, the Corporation formally documents the relationship between the hedging instruments and hedged items,
including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods
that will be used to assess the effectiveness of the hedging relationship. The Corporation makes an assessment, both
at the inception of the hedge relationship as well as on an ongoing basis, whether the hedging instruments are expected
to be effective in offsetting the changes in the fair value or cash flows of the respective hedged items during the period
for which the hedge is designated.
For a cash flow hedge of a forecasted transaction, the transaction should be highly probable to occur and should
present an exposure to variations in cash flows that could ultimately affect reported net earnings.
Derivatives are recognized initially at fair value, and attributable transaction costs are recognized in net earnings as
incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted
for as described below.
Cash flow hedges
When a derivative is designated as the hedging instrument in a hedge of the variability in cash flows attributable to a
particular risk associated with a recognized asset or liability or a highly probable forecasted transaction that could affect
net earnings, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive
income and presented in accumulated other comprehensive income as part of equity. The amount recognized in other
comprehensive income is removed and included in net earnings under the same line item in the consolidated
statements of earnings (loss) as the hedged item, in the same period that the hedged cash flows affect net earnings.
Any ineffective portion of changes in the fair value of the derivative is recognized immediately in net earnings. If the
hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then
hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognized in other
comprehensive income remains in accumulated other comprehensive income until the forecasted transaction affects net
earnings. If the forecasted transaction is no longer expected to occur, then the balance in accumulated other
comprehensive income is recognized immediately in net earnings.
Net investment in foreign operation hedges
The Corporation applies hedge accounting to foreign currency differences arising between the functional currency of the
foreign operation and the Corporation’s functional currency (Canadian dollars).
When a derivative is designated as the hedging instrument in a hedge of the foreign currency exposure on the carrying
amount of the net assets of the foreign operation, the effective portion of changes in the fair value of the derivative is
recognized in other comprehensive income and presented in accumulated other comprehensive income as part of
equity. The gain or loss relating to the portion of the foreign exchange forwards in excess of the investment in the
foreign subsidiaries is recognized immediately in earnings. Any ineffective portion of changes in the hedging
instruments is recognized directly in net earnings. Amounts previously recognized in accumulated other comprehensive
income are recognized in earnings when there is a reduction in the net investment.
Foreign currency differences arising on the translation of a financial liability designated as a hedge of a net investment
in a foreign operation are recognized in other comprehensive income to the extent that the hedge is effective, and are
presented within equity in the accumulated other comprehensive income. Any ineffective portion of changes in the
hedging instruments is recognized directly in net earnings. Amounts previously recognized in accumulated other
comprehensive income are recognized in earnings when there is a reduction in the net investment.
Revenue recognition
Revenue is recognized as the Corporation satisfies its performance obligation, over time, upon delivery of electricity at
rates provided for under power purchase agreements ("PPAs"), or on the merchant market. Revenue related to
compensations from insurance or suppliers for loss of revenues are recognized when it is virtually certain that the claim
will be received. Penalties for non-production of electricity are recorded at the time when it is highly probable that the
amount will be payable.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p103
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Government assistance
Government assistance is recorded in the consolidated financial statements when there is reasonable assurance that
the Corporation complied with all conditions necessary to obtain the assistance.
The Corporation incurs renewable energy development expenditures, which are eligible for refundable or non-
refundable investment tax credits ("ITCs"). The recorded ITCs are based on management's estimates of amounts
expected to be recovered and are subject to an audit by the taxation authorities. ITCs for renewable energy
development expenditures are reflected as a reduction in the cost of the assets or expenses to which they relate.
Current United States tax law allows wind energy projects to receive non-refundable production tax credits ("PTCs") that
are earned for each MWh of generation during the first 10 years of the projects' operation, which are recognized in
revenues and production tax credits, over time, as electricity is delivered.
Non-refundable ITCs and PTCs are recognized to the extent that it is probable that they can be utilized against future
taxable income or through a transfer to third parties when such credits are transferable.
Foreign currency translation
The Corporation and its subsidiaries each determine their functional currency based on the currency of the primary
economic environment in which they operate. Transactions denominated in a currency other than the functional
currency of an entity are translated at the exchange rate in effect on the transaction date. The resulting exchange gains
and losses are included in each entity's net earnings in the period in which they arise.
The Corporation's foreign operations are translated to the Corporation's presentation currency, for inclusion in the
consolidated financial statements. Foreign-denominated monetary and non-monetary assets and liabilities of foreign
operations are translated at exchange rates in effect at the end of the reporting period and revenue and expenses are
translated at exchange rates in effect at the transaction date. The resulting translation gains and losses are included in
other comprehensive income (loss) with the cumulative gain or loss reported in accumulated other comprehensive
income (loss). Amounts previously recognized in accumulated other comprehensive income are recognized in earnings
when there is a reduction in the net investment.
The exchange rates for the currencies used in the preparation of the consolidated financial statements were as follows:
Exchange rates as at
Average exchange rates for year
December 31, 2024
December 31, 2023
2024
2023
Euro
1.4890
1.4626
1.4818
1.4597
U.S. dollar
1.4384
1.3226
1.3698
1.3497
lncome taxes
Current and deferred income taxes are recognized in earnings except to the extent that they relate to a business
combination, or to items recognized directly in equity or in other comprehensive income (loss).
Current income taxes are the expected taxes on the taxable income or loss for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to taxes payable in respect of previous years.
Deferred income taxes are recognized in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the
tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been
enacted or substantively enacted at the reporting date.
Deferred income tax is not recognized in respect of subsidiaries for the temporary differences between the carrying
amounts of the investments and the tax basis, unless such differences are expected to reverse in the foreseeable
future.
Deferred income tax assets are recognized to the extent that it is probable that the deductible tax attributes can be
utilized on the reversal of temporary differences, against future taxable income, or through a transfer to third parties for
credits that are transferable.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p104
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Earnings (loss) per share
The Corporation presents basic and diluted earnings per share data for its common shares. Basic earnings (loss) per
share is calculated by dividing net earnings attributable to common shareholders of the Corporation by the weighted
average number of shares outstanding during the period as adjusted by the number of common shares held in trust
under the PSP plan.
The Corporation uses the treasury share method for calculating diluted earnings (loss) per share. Diluted earnings
(loss) per share is calculated similarly to basic earnings (loss) per share except that the weighted average shares
outstanding are increased to include additional shares from the assumed conversion of convertible debentures and the
exercise of stock options, if dilutive. The number of additional shares is calculated by assuming that convertible
debentures were converted and that outstanding stock options were exercised and that the proceeds from such
exercises were used to acquire shares at the average market price during the year.
Changes in accounting policies
Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
In January 2020, the IASB issued amendments to IAS 1 Presentation of Financial Statements, to clarify the
classification of liabilities as current or non-current. On October 31, 2022, the IASB issued Non-current Liabilities with
Covenants (Amendments to IAS 1) (the 2022 amendments), to improve the information a company provides about long-
term debt with covenants. The Corporation adopted the amendments on January 1, 2024, with no impact to the
consolidated financial statements.
New accounting standards and interpretations issued but not yet effective
Presentation and Disclosure in Financial Statements (IFRS 18)
In April 2024, the IASB issued a new Accounting Standard, IFRS 18 Presentation and Disclosure in Financial
Statements, which will replace IAS 1 Presentation of Financial Statements. IFRS 18 will introduce the following main
changes from IAS 1:
–
improved consistency and structure in the Statement of Earnings, including:
–
formally defined Operating Profit and Profit or Loss before Financing and Income Tax subtotals;
–
Operating, Investing and Financing income and expenses categories, based on a company's main
business activities; and
–
an analysis of the Operating expenses by function or by nature, directly on the face of the Statement
of Earnings, with details regarding their nature in the notes when expenses are presented by function
in the Statement of Earnings.
–
new guidance regarding Management-defined Performance Measures ("MPMs"); and
–
new guidance regarding aggregation of items in the financial statements.
The new standard is effective for annual periods beginning on or after January 1, 2027, and applies retrospectively.
Early adoption is permitted. The impact on the Corporation's financial statements is being assessed by Management.
Power Purchase Agreements (Amendments to IFRS 9 and IFRS 7)
In December 2024, the IASB issued amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments:
Disclosures, which include changes and clarifications regarding power purchase agreements ("PPAs"), as follows:
–
clarifications on the application of the own-use exemption for purchasers of power purchase agreements
("PPAs"), allowing, by analogy, the seller to apply the own-use exemption if the entity has been, and expects to
be, a net-seller of electricity for the contract period;
–
the possibility for entities to designate a variable nominal volume of forecasted sales of renewable electricity as
the hedged transaction, rather than a fixed volume based on highly probable estimates, facilitating an
economic offset between the hedging instrument and the hedged transaction, enabling companies to apply
hedge accounting; and
–
additional disclosure requirements, such as
–
contractual features exposing the company to variability in electricity volume;
–
qualitative information about how an entity assessed whether a contract might become onerous; and
–
qualitative and quantitative information about the costs and proceeds associated with sales of
electricity, based on the information used to determine whether the company is a net-seller of
electricity for the contract period.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p105
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
These amendments apply for annual reporting periods beginning on or after January 1, 2026. Earlier application is
permitted. The impact for the Corporation is being assessed by management.
Amendments to IFRS 9 (Accounting for electronic payments)
The IASB has issued amendments to IFRS 9 and IFRS 7 in May 2024. These amendments related to classification of
financial assets and accounting for settlement by electronic payments. Following the amendments to IFRS 9,
companies that recognize or derecognize financial assets or financial liabilities on the payment initiation date could see
a change to their accounting as a general requirement is added that reiterate the following requirements:
–
financial instruments are recognized when an entity becomes a party to a contract;
–
a financial asset is derecognized when rights to the cash flows expire, or the asset is transferred; and
–
a financial liability is derecognized when it is settled, which is the date on which the liability is extinguished.
The amendments allow an exception that would apply only for financial liabilities. The exception would allow a company
to derecognize a financial liability before the settlement date, when it uses an electronic payment system and, after
initiating the payment, when:
–
it has no practical ability to withdraw, stop or cancel the payment instruction;
–
it has no practical ability to access the cash to be used for settlement as a result of the payment instruction;
and
–
the settlement risk associated with the electronic payment system is insignificant.
These amendments apply for annual reporting periods beginning on or after January 1, 2026. Earlier application is
permitted. The impact for the Corporation is being assessed by management.
3.
USE OF JUDGMENTS AND ESTIMATES
The preparation of consolidated financial statements in conformity with IFRS requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from these estimates. These estimates and assumptions are based on current market
conditions, management's planned course of action and assumptions about future business and economic conditions.
Changes in the underlying assumptions and estimates could have a material impact on the reported amounts. These
estimates are reviewed periodically. If adjustments prove necessary, they are recognized in earnings in the period in
which they are made.
Critical judgments and estimates
Determining control, joint control or significant influence over an investee
The determination of whether the Corporation has control, joint control or significant influence over an investee requires
the Corporation to make assumptions and judgments in evaluating the classification requirements. In particular, the
Corporation exercises judgement in determining whether non-wholly owned subsidiaries are controlled by the
Corporation, which involves assessing: (i) how the decisions about the relevant activities of the investee are made;
(ii) whether the rights of other co-investors are protective or substantive in nature; and (iii) the Corporation's ability to
influence the returns of the investee.
Business acquisition fair value
The Corporation makes a number of estimates when determining the acquisition date fair values of consideration
transferred, assets acquired and liabilities assumed in a business acquisition. The Corporation calculates fair values
using appropriate valuation techniques, which are generally based on discounted future cash flows. Future cash flows
may be influenced by a number of assumptions such as electricity production, duration of the projects, selling prices,
costs to operate, capital expenditures, growth rate and the discount rate. The likelihood of being able to develop future
projects is also assessed in respect of the competitive business environment and the willingness expressed by the
governmental authorities to procure additional sources of energy.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p106
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Useful lives of property, plant and equipment and intangible assets
Property, plant and equipment and intangible assets represent a significant proportion of the Corporation's total assets.
The Corporation reviews estimates of the useful lives of property, plant and equipment and intangible assets on an
annual basis and adjusts depreciation on a prospective basis, if necessary.
Impairment of non-financial assets
The Corporation is required to make judgments in assessing at the end of each reporting period whether there is any
indication that an asset may be impaired. In making this assessment, the Corporation uses various indicators including,
but not limited to, adverse changes in the industry or economic conditions, a lower-than-expected economic
performance of the asset or a significant change in market returns or interest rates. When such an indication exists, or
at least annually for goodwill, the Corporation makes a number of estimates when determining the recoverable amount
of an asset or a cash-generating unit using value in use calculations based on discounted future cash flows. Future
cash flows may be influenced by a number of assumptions such as electricity production, duration of the projects,
selling prices, costs to operate, capital expenditures and the discount rate.
Asset retirement obligations
The Corporation makes a number of estimates when calculating the asset retirement obligations that represent the
present value of future remediation costs for various projects. Estimates for these costs are dependent on labour costs,
the effectiveness of remedial and restoration measures, inflation rates, discount rates that reflect a current market
assessment of the time value of money and the risk specific to the obligation, and the timing of the outlays.
Financial instruments measured at fair value
In measuring financial instruments at fair value, the Corporation makes estimates and assumptions, including estimates
and assumptions about forward electricity prices, interest rates, credit spreads and exchange rates. See Note 26 –
Financial Risk Management and Fair Value Disclosures for further details.
The Corporation may, from time to time, enter into long-term power hedge agreements. As part of determining fair
value, the Corporation makes certain assumptions, estimates and judgments regarding future events. Unobserved
prices are inherently subjective and impact the change in fair value recognized in the consolidated statements of
earnings (loss).
Tax equity financing
When a tax equity partnership is formed, the Corporation exercises judgement in assessing whether it retains control
over the entity, and in assessing the appropriate classification of the tax equity investor's contribution, which generally
bears the characteristics of a liability as the arrangements are made so that the contribution is repaid over time until the
tax equity investor has attained an agreed-upon rate of return. Judgment is also exercised in assessing the nature of
the tax equity investor's interest after it has attained the agreed-upon rate of return, which generally bears the
characteristics of equity as it retains entitlement to a portion of the partnership's variable returns and shares a residual
interest in the net assets of the partnership.
Tax equity investors generally require a specified allocation of the project's cash distributions and tax attributes such as
production tax credits, investment tax credits and taxable income or loss, including accelerated tax depreciation.
Estimates are made when determining the amount and allocation of cash distributions and tax attributes to the tax
equity investors, which may be influenced by a number of assumptions such as electricity production, selling prices,
costs to operate and tax amounts.
Hedging
The Corporation makes an assessment, both at the inception of the hedge relationship as well as on an ongoing basis,
whether the hedging instruments are expected to be effective in offsetting the changes in the fair value or cash flows of
the respective hedged items during the period for which the hedge is designated.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p107
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
4.
EXPENSES BY NATURE
Operating, general and administrative, prospective projects expenses and ERP implementation costs, as reported in the
consolidated statements of earnings (loss), have been grouped by nature of expenses as follows:
Year ended December 31
2024
2023
Operation and maintenance
117,728
120,681
Salaries and benefits1
83,429
77,296
Property taxes, other taxes and royalties
55,627
61,516
Insurance
31,496
28,190
Professional fees2
23,430
23,171
Prospective expenses
17,865
11,203
Other expenses
17,324
18,252
Administrative expenses
1,508
1,541
Total of Operating, General and Administrative, Prospective
Projects and ERP Implementation
348,407
341,850
1.
Includes $3,032 in salaries and benefits recognized as ERP implementation expenses ($4,533 in 2023).
2.
Includes $4,542 in professional fees recognized as ERP implementation expenses ($8,118 in 2023).
5.
FINANCE COSTS
Year ended December 31
2024
2023
Interest expense on long-term corporate and project loans
260,242
261,014
Interest expense on tax equity financing
25,999
29,450
Interest expense on convertible debentures
13,662
13,611
Amortization of financing fees
12,398
12,796
Inflation on compensation interest
5,683
8,836
Interests on lease liabilities
9,184
9,194
Accretion of long-term loans and borrowings and other liabilities
11,126
8,822
Other
2,601
4,663
340,895
348,386
6.
OTHER NET (INCOME) EXPENSES
Year ended December 31
2024
2023
Interest income
(6,093)
(7,494)
Tax attributes allocated to tax equity investors
(1,195)
(1,776)
(Gain) loss on foreign exchange
(699)
133
Acquisition, integration, and restructuring costs
2,766
3,297
Change in fair value of contingent considerations (Note 20)
—
25,563
Other expenses, net
1,822
7,308
(3,399)
27,031
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p108
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
7.
INVESTMENT IN JOINT VENTURE AND ASSOCIATES
a) Details of material joint ventures and associates
Joint ventures and
associates
Principal activity
Place of creation
and principal
place of
operation
Proportion of ownership interest and voting
rights held by the Corporation
December 31, 2024
December 31, 2023
Toba Montrose
Own and operate two
hydroelectric facilities
British Columbia
40 %
40 %
Dokie
Own and operate a wind facility
British Columbia
25.5 %
25.5 %
Jimmie Creek 1
Own and operate a
hydroelectric facility
British Columbia
50.99 %
50.99 %
Umbata Falls
Own and operate a
hydroelectric facility
Ontario
49 %
49 %
Viger-Denonville
Own and operate a wind facility
Quebec
50 %
50 %
Innavik
Own and operate a
hydroelectric facility
Quebec
50 %
50 %
1.
The Corporation does not consolidate this entity as it does not control the decision making.
b) Commitments of joint ventures and associates
As at December 31, 2024, the Corporation's share of the expected commitment payments for joint ventures and
associates are as follows:
Year of expected payment
Under 1 year
1 to 5 years
Thereafter
Total
Purchase obligations
3,045
12,680
34,741
50,466
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p109
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Summary Statements of Earnings (Loss) and Comprehensive Income (Loss)
The summarized financial information below represents amounts shown in the material joint ventures' and associates' financial statements prepared in accordance
with IFRS adjusted for fair value adjustments at acquisition and differences in accounting policies.
Year ended December 31, 2024
Toba Montrose
Dokie
Jimmie Creek
Umbata Falls
Viger-Denonville
Innavik
Revenues
74,363
39,366
23,989
6,747
10,787
11,435
Expenses
Operating, general and administrative expenses
17,458
10,620
4,175
2,148
2,748
2,593
Depreciation and amortization
19,351
14,192
3,797
4,199
1,977
3,691
Operating income
37,554
14,554
16,017
400
6,062
5,151
Finance costs
21,344
4,932
9,134
1,749
2,326
11,737
Other net income
(870)
(306)
(208)
(106)
(207)
(267)
Change in fair value of financial instruments
(1,424)
—
—
(250)
(350)
—
Net earnings (loss)
18,504
9,928
7,091
(993)
4,293
(6,319)
Other comprehensive loss
(1,714)
—
—
—
(850)
—
Total comprehensive income (loss)
16,790
9,928
7,091
(993)
3,443
(6,319)
Net earnings (loss) attributable to Innergex
7,401
2,532
3,616
(487)
2,147
(3,159)
Other comprehensive loss attributable to Innergex
(686)
—
—
—
(425)
—
Total
6,715
2,532
3,616
(487)
1,722
(3,159)
Innergex Renewable Energy Inc
Notes to the Consolidated Financial Statements p110
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Year ended December 31, 2023
Toba Montrose
Dokie
Jimmie Creek
Umbata Falls
Viger-Denonville
Revenues
70,028
42,398
24,585
7,663
9,925
Expenses
Operating, general and administrative expenses
15,978
11,014
3,767
2,053
2,099
Depreciation and amortization
19,191
14,030
3,804
4,182
2,028
Operating Income
34,859
17,354
17,014
1,428
5,798
Finance costs
21,880
5,487
9,159
2,124
2,490
Other net (income) expenses
(671)
(330)
29
(323)
(228)
Change in fair value of financial instruments
(5,473)
—
—
(472)
(406)
Net earnings (loss)
19,123
12,197
7,826
99
3,942
Other comprehensive (loss) income
(8,228)
—
—
—
(827)
Total comprehensive income (loss)
10,895
12,197
7,826
99
3,115
Net earnings (loss) attributable to Innergex
7,649
3,110
3,992
48
1,972
Other comprehensive loss (income) attributable to Innergex
(3,291)
—
—
—
(413)
Total
4,358
3,110
3,992
48
1,559
Innergex Renewable Energy Inc
Notes to the Consolidated Financial Statements p111
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Summary Statements of Financial Position
As at December 31, 2024
Toba Montrose
Dokie
Jimmie Creek
Umbata Falls
Viger-
Denonville
Innavik
Current assets
27,548
12,315
7,010
1,889
3,882
8,957
Non-current assets
640,002
157,877
208,197
31,903
40,218
144,389
667,550
170,192
215,207
33,792
44,100
153,346
Current liabilities
14,068
9,464
5,107
7,188
4,596
28,200
Non-current liabilities
470,846
84,469
161,121
16,592
29,774
138,561
Partner's equity interest (deficit)
182,636
76,259
48,979
10,012
9,730
(13,415)
667,550
170,192
215,207
33,792
44,100
153,346
As at December 31, 2023
Toba Montrose
Dokie
Jimmie Creek
Umbata Falls
Viger-
Denonville
Innavik
Current assets
35,757
22,979
6,966
1,474
3,394
8,702
Non-current assets
656,960
171,985
211,211
35,901
42,202
147,550
692,717
194,964
218,177
37,375
45,596
156,252
Current liabilities
27,284
19,316
6,946
5,582
4,032
24,711
Non-current liabilities
481,286
94,918
161,642
20,789
33,025
138,637
Partner's equity interest (deficit)
184,147
80,730
49,589
11,004
8,539
(7,096)
692,717
194,964
218,177
37,375
45,596
156,252
Innergex Renewable Energy Inc
Notes to the Consolidated Financial Statements p112
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Reconciliation of the above summarized financial information to the carrying amount of the interest in the joint ventures and associates recognized in the
consolidated financial statements:
Year ended December 31, 2024
Toba Montrose
Dokie
Jimmie Creek
Umbata Falls
Viger-
Denonville
Others
Total
As at January 1, 2024
73,655
20,585
25,309
5,392
4,265
803
130,009
Increase in investment
—
—
—
—
—
28
28
Share of earnings (loss)
7,401
2,532
3,616
(487)
2,147
—
15,209
Share of other comprehensive (loss)
income
(686)
—
—
—
(425)
—
(1,111)
Distributions received
(7,320)
(3,672)
(3,927)
—
(1,125)
—
(16,044)
As at December 31, 2024
73,050
19,445
24,998
4,905
4,862
831
128,091
Year ended December 31, 2023
Toba Montrose
Dokie
Jimmie Creek
Umbata Falls
Viger-
Denonville
Others
Total
As at January 1, 2023
77,377
20,586
26,722
6,128
4,256
717
135,786
Increase in investment
—
—
—
—
—
58
58
Share of earnings
7,649
3,110
3,992
48
1,972
20
16,791
Share of other comprehensive loss
(3,291)
—
—
—
(413)
(1)
(3,705)
Foreign currency translation differences
—
—
—
—
—
9
9
Distributions received
(8,080)
(3,111)
(5,405)
(784)
(1,550)
—
(18,930)
As at December 31, 2023
73,655
20,585
25,309
5,392
4,265
803
130,009
Innergex Renewable Energy Inc
Notes to the Consolidated Financial Statements p113
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
8.
DERIVATIVE FINANCIAL INSTRUMENTS
a) Financial position
The following table shows a reconciliation from the opening balances to the closing balances for the derivative financial
instruments :
Financial assets (liabilities)
Foreign
exchange
forwards
(Level 2)
Interests
hedging
derivatives
(Level 2)
Power hedges
(Level 3)
Total
As at January 1, 2024
(8,616)
79,102
(66,170)
4,316
Unrealized portion of change in fair value recognized
in earnings (loss)1
3,434
(3,635)
87,338
87,137
Change in fair value recognized in other
comprehensive income (loss)
(3,624)
(21,666)
(3,429)
(28,719)
Amortization of accumulated other comprehensive
income recognized in revenue
—
—
3,429
3,429
Net foreign exchange differences
—
2,832
(1,560)
1,272
As at December 31, 2024
(8,806)
56,633
19,608
67,435
1.
Refer to Note 8 b) – Derivative Financial Instruments for a reconciliation to the change in fair value recognized in earnings (loss).
Financial assets (liabilities)
Foreign
exchange
forwards
(Level 2)
Interests
hedging
derivatives
(Level 2)
Power hedges
(Level 3)
Total
As at January 1, 2023
(3,555)
98,138
(69,333)
25,250
Business acquisitions
—
10,242
—
10,242
Business dispositions
—
(547)
—
(547)
Unrealized portion of change in fair value recognized
in earnings (loss)1
(531)
8,720
1,460
9,649
Change in fair value recognized in other
comprehensive income (loss)
(4,530)
(37,402)
(3,442)
(45,374)
Amortization of accumulated other comprehensive
income recognized in revenue
—
—
3,442
3,442
Net foreign exchange differences
—
(49)
1,703
1,654
As at December 31, 2023
(8,616)
79,102
(66,170)
4,316
1.
Refer to Note 8 b) – Derivative Financial Instruments for a reconciliation to the change in fair value recognized in earnings (loss).
b) Change in fair value of financial instruments recognized in the consolidated
statements of earnings (loss)
Year ended December 31
2024
2023
Unrealized portion of change in fair value of financial instruments
(87,137)
(9,649)
Realized portion of change in fair value of financial instruments:
Realized loss on power hedges1
71,139
24,632
Realized gain on the interest rate swaps2
(16,957)
(1,307)
Change in fair value of financial instruments
(32,955)
13,676
1.
For the year ended December 31, 2024, the realized loss on power hedges includes a $74,496 loss on the settlement of the
Phoebe power hedge as part of the Texas Portfolio Transaction (Note 24).
2.
For the year ended December 31, 2024, the realized gain on the interest swaps includes a $9,299 gain on the settlement of the
interest swaps as part of the Texas Portfolio Transaction (Note 24).
Innergex Renewable Energy Inc
Notes to the Consolidated Financial Statements p114
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
9.
INCOME TAXES
a) Income taxes recognized in the consolidated statements of earnings (loss)
The following table summarizes the reconciliation of the income tax expense calculated at the Canadian statutory
income tax rate and the income tax expense recognized in the consolidated statements of earnings (loss):
December 31, 2024
December 31, 2023
Loss before income tax
(15,805)
(152,727)
Canadian statutory income tax rate
26.6 %
26.6 %
Income tax expense calculated at the statutory rate
(4,204)
(40,625)
Items affecting the statutory rate:
Non-taxable income
2,474
(14,607)
Amounts attributable to Tax Equity Investors
4,857
13,598
Change in deferred tax assets not recognized
(30,079)
(20,351)
Income taxable at a different rate than the Canadian statutory
rate
(2,827)
5,932
Decrease in deferred income tax rates
(663)
(1,930)
Increase in taxable temporary differences in relation to
investments in subsidiaries and in joint ventures
1,614
1,143
Tax on dividends on preferred shares
148
157
Adjustments recognized in the current year in relation to the
current tax of prior years
(1,335)
(20)
Adjustments recognized in the current year in relation to the
deferred tax of prior years
8,589
12,148
Income tax on loss (earnings) allocated to non-controlling
interests on non-taxable entities
(13,888)
3,074
Others
(6,978)
(5,432)
Provision for income taxes recognized in the current year
(42,292)
(46,913)
Current income taxes
12,086
8,161
Deferred income taxes
(54,378)
(55,074)
The tax rate used for 2024 and 2023 reconciliations above is the average combined corporate tax rate payable by
corporate entities in Canada on taxable profits under federal and provincial tax laws.
Innergex Renewable Energy Inc
Notes to the Consolidated Financial Statements p115
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
b) Deferred income tax balances
The following is the analysis of deferred income tax assets (liabilities) presented in the consolidated statements of financial position:
As at
January 1, 2024
Recognized in
statement of
earnings
Recognized in
other
comprehensive
loss
Recognized
in business
dispositions
Recognized
directly in
equity
Net exchange
differences
As at
December 31,
2024
Deferred income tax assets (liabilities) in relation to:
Tax credits recoverable
—
(13,455)
—
—
—
(742)
(14,197)
Property, plant and equipment
(634,527)
(29,309)
—
112,750
—
(25,302)
(576,388)
Intangible assets
(243,285)
33,714
—
(6,618)
—
(7,294)
(223,483)
Project development costs
42,313
(1,527)
—
—
—
(151)
40,635
Investments in subsidiaries and in joint ventures and
associates
(62,882)
3,905
—
—
—
(398)
(59,375)
Derivative financial instruments
31,672
(18,875)
5,353
(10,057)
—
(1,424)
6,669
Long-term loans and borrowings
(21,093)
556
—
4
—
(2,145)
(22,678)
Capitalized investment tax credits
25,425
(8,485)
—
—
—
1,757
18,697
Convertible debentures
2,130
(1,619)
—
—
—
(3)
508
Other liabilities
93,953
(2,674)
—
(7,560)
—
4,563
88,282
Financing fees
(10,250)
1,277
—
(1,035)
—
(212)
(10,220)
Share-based payment
840
189
—
—
—
—
1,029
Disallowed interest carried forward
713
(63)
—
—
—
54
704
Others
(2,677)
1,669
—
360
—
(44)
(692)
(777,668)
(34,697)
5,353
87,844
—
(31,341)
(750,509)
Tax losses carried forward
336,906
89,075
—
(21,827)
2,070
24,134
430,358
(440,762)
54,378
5,353
66,017
2,070
(7,207)
(320,151)
As at December 31, 2024, the Corporation, its subsidiaries and joint ventures and associates have non-capital losses totalling approximately $1,680,000 that may be
applied against future taxable income. The non-capital losses in Canada and losses incurred before 2018 in the United-States expire gradually between 2025 and 2044.
The non-capital losses in France are subject to restrictions over time but have no expiration date.The non-capital losses in Chile and losses incurred after 2017 in United
States have no expiration date.
The Corporation recognized a deferred income tax asset on non-capital losses because it is probable that sufficient taxable profit and taxable capital gains will be available
from renewable energy projects currently in operation.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p116
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
As at
January 1, 2023
(Note 2)
Recognized in
statement of
earnings
Recognized in
other
comprehensiv
e loss
Acquired in
business
acquisitions
Acquired in
business
disposition
Recognized
directly in
equity
Net exchange
differences
As at
December 31,
2023
Deferred income tax assets (liabilities) in
relation to:
Assets held for sale
3,062
(3,050)
—
—
—
—
(12)
—
Property, plant and equipment
(627,305)
(27,794)
—
7,288
7,132
—
6,152
(634,527)
Intangible assets
(220,902)
18,670
—
(42,811)
—
—
1,758
(243,285)
Project development costs
38,090
4,437
—
—
—
—
(214)
42,313
Investments in subsidiaries and in joint
ventures and associates
(67,239)
3,996
(63)
—
—
—
424
(62,882)
Derivative financial instruments
29,622
(5,142)
10,231
(2,725)
123
—
(437)
31,672
Long-term loans and borrowings
(20,133)
(1,455)
—
—
(111)
—
606
(21,093)
Capitalized investment tax credits
28,891
(1,876)
—
—
(967)
—
(623)
25,425
Convertible debentures
1,613
517
—
—
—
—
—
2,130
Other liabilities
77,999
17,226
—
—
—
—
(1,272)
93,953
Financing fees
(15,317)
4,774
—
202
—
—
91
(10,250)
Share-based payment
804
36
—
—
—
—
—
840
Disallowed interest carried forward
5,021
(4,274)
—
—
—
—
(34)
713
Others
28
(2,757)
—
—
—
—
52
(2,677)
(765,766)
3,308
10,168
(38,046)
6,177
—
6,491
(777,668)
Tax losses carried forward
297,120
51,766
—
—
—
(6,684)
(5,296)
336,906
(468,646)
55,074
10,168
(38,046)
6,177
(6,684)
1,195
(440,762)
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p117
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
c) Unrecognized deductible temporary differences, unused tax losses and unused tax
credits
December 31, 2024
December 31, 2023
Non-capital tax losses
234,664
379,339
Capital tax losses
41,358
72,833
Disallowed interests
116,253
72,187
Property, plant and equipment
59,100
69,468
Tax credits
4,007
13,342
Derivative financial instruments
—
10,069
Transaction costs
—
477
455,382
617,715
The unrecognized tax losses will expire gradually between 2026 and 2044. The unrecognized tax credits will expire
gradually between 2035 and 2044.
10. EARNINGS (LOSS) PER SHARE
Year ended December 31
Basic
2024
2023
Net earnings (loss) attributable to owners of the parent
15,893
(98,451)
Dividends declared on preferred shares
(5,632)
(5,632)
Net earnings (loss) attributable to common shareholders
10,261
(104,083)
Weighted average number of common shares
202,446,487
203,565,046
Basic net earnings (loss) per share ($)
0.05
(0.51)
Year ended December 31
Diluted
2024
2023
Net earnings (loss) attributable to common shareholders
10,261
(104,083)
Diluted weighted average number of common shares
203,812,116
203,565,046
Diluted net earnings (loss) per share ($)
0.05
(0.51)
Year ended December 31
Instruments that are excluded from the dilutive elements
2024
2023
Stock options
—
289,111
Shares held in trust related to the Performance Share Plan
—
713,732
Convertible debentures
13,604,473
13,604,473
13,604,473
14,607,316
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p118
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
11. RESTRICTED CASH
As at
December 31, 2024
December 31, 2023
Restricted proceeds account
27,839
26,935
Restricted cash accounts
947
5,653
Debt service payment accounts
9,077
7,511
37,863
40,099
As required under several projects' credit agreements, the Corporation maintains restricted cash accounts and
restricted proceeds accounts. The unused portion of loan proceeds are held in restricted proceeds accounts managed
by the lenders and amounts are transferred from time to time into the restricted cash accounts to finance the
construction of the projects. The restricted cash accounts are used to pay the current construction costs of the projects
and to hold the construction holdback amounts that will be released at the end of the construction of the respective
projects. The Corporation also maintains debt service payment accounts required under certain financing agreements.
12. ACCOUNTS RECEIVABLES
As at
December 31, 2024
December 31, 2023
Trade
147,553
149,480
Advances to related parties
26,635
12,684
Commodity taxes
16,458
26,046
Dividends receivable on Innavik preferred shares
15,649
12,094
Income taxes receivable
1,723
5,454
Other
24,672
26,936
232,690
232,694
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p119
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
13. PROPERTY, PLANT AND EQUIPEMENT
Lands
Hydroelectric
facilities
Wind farm
facilities
Solar facilities
Storage
facilities
Facilities
under
construction
Other
Total
Cost
As at January 1, 2024
327,429
2,628,157
3,510,671
857,400
105,272
742,259
67,843
8,239,031
Additions1
953
9,823
6,635
2,974
2,753
416,420
7,104
446,662
Investment tax credits2
—
—
—
—
—
(65,664)
—
(65,664)
Transfer of assets upon commissioning
—
—
818,550
—
74,998
(893,548)
—
—
Reclassification
—
—
—
399
—
2,069
(2,468)
—
Dispositions
—
(139)
(2,412)
(518)
—
(1,779)
(650)
(5,498)
Other changes3
4,913
—
(3,520)
(325)
(113)
—
89
1,044
Net foreign exchange differences
21,428
47,123
170,383
59,019
12,691
54,383
1,178
366,205
As at December 31, 2024
354,723
2,684,964
4,500,307
918,949
195,601
254,140
73,096
8,981,780
Accumulated depreciation and impairment
As at January 1, 2024
(33,776)
(497,506)
(799,597)
(195,639)
(729)
(115,428)
(35,542)
(1,678,217)
Depreciation4
(9,866)
(53,398)
(124,016)
(21,626)
(8,193)
—
(10,301)
(227,400)
Dispositions
—
63
1,071
85
—
—
378
1,597
Net foreign exchange differences
(2,196)
(4,219)
(18,027)
(11,056)
(441)
(9,101)
(419)
(45,459)
As at December 31, 2024
(45,838)
(555,060)
(940,569)
(228,236)
(9,363)
(124,529)
(45,884)
(1,949,479)
Carrying amounts as at
December 31, 2024
308,885
2,129,904
3,559,738
690,713
186,238
129,611
27,212
7,032,301
All of the property, plant and equipment are given as security under the respective project financing or for corporate financing.
1.
The financing costs related to a specific project financing are entirely capitalized to the specific property, plant and equipment. Financing costs related to the revolving credit facilities
are capitalized for the portion of the financing used for a specific property, plant and equipment. Additions in the current period include $48,936 of capitalized financing costs incurred
prior to commissioning.
2.
The Corporation accrued for US$47,000 ($65,664) in investment tax credits recoverable in relation to the construction of the Hale Kuawehi solar project, which were recognized as a
reduction in the cost of property, plant and equipment. As at December 31, 2024 the Hale Kuawehi investment tax credit is included in the current portion of tax credits recoverable,
with other tax credits, totalling $80,464.
3.
Includes remeasurements of right-of-use assets and asset retirement obligations of $5,002 and $(3,958), respectively.
4.
An amount of $1,003 of the depreciation expense for the land leases is capitalized as a construction cost in facilities under construction.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p120
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Lands
Hydroelectric
facilities
Wind farm
facilities
Solar facilities
Storage
facilities
Facilities
under
construction
Other
Total
Cost
As at January 1, 2023
301,094
2,634,926
3,511,736
875,437
—
190,665
59,823
7,573,681
Additions
21,855
9,377
20,309
2,547
7,009
654,775
14,887
730,759
Investment tax credits
—
—
—
—
—
9,201
—
9,201
Business acquisitions
8,200
—
—
28,674
—
87
36,961
Transfer of assets upon
commissioning
—
—
—
—
93,042
(93,042)
—
—
Business disposal
(1,322)
—
—
(29,050)
—
(1,439)
(31,811)
Reclassification
—
—
—
(3,562)
7,689
—
(4,127)
—
Dispositions
—
(3,270)
(5,812)
(556)
(1,746)
(429)
(11,813)
Other changes
2,907
—
12,648
(520)
—
(837)
14,198
Net foreign exchange differences
(5,305)
(12,876)
(28,210)
(15,570)
(2,468)
(17,594)
(122)
(82,145)
As at December 31, 2023
327,429
2,628,157
3,510,671
857,400
105,272
742,259
67,843
8,239,031
Accumulated depreciation and impairment
As at January 1, 2023
(24,888)
(445,804)
(683,784)
(152,782)
—
(25,226)
(28,826)
(1,361,310)
Business dispositions
162
5,367
—
442
5,971
Depreciation
(9,444)
(53,560)
(118,120)
(25,390)
(525)
—
(7,853)
(214,892)
Reclassification
—
—
(214)
214
—
Dispositions
—
968
1,385
120
—
426
2,899
Impairment
—
—
—
(25,362)
(93,495)
—
(118,857)
Net foreign exchange differences
394
890
922
2,408
10
3,293
55
7,972
As at December 31, 2023
(33,776)
(497,506)
(799,597)
(195,639)
(729)
(115,428)
(35,542)
(1,678,217)
Carrying amounts as at
December 31, 2023
293,653
2,130,651
2,711,074
661,761
104,543
626,831
32,301
6,560,814
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p121
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Right-of-use assets
Included in property, plant and equipment are right-of-use assets pursuant to lease agreements. Below is a reconciliation of the carrying amounts:
Land
Other
Total
Cost
As at January 1, 2024
291,567
12,741
304,308
Other changes
4,913
89
5,002
Net foreign exchange differences
19,188
285
19,473
As at December 31, 2024
315,668
13,115
328,783
Accumulated depreciation
As at January 1, 2024
(33,776)
(6,109)
(39,885)
Depreciation
(9,866)
(1,709)
(11,575)
Net foreign exchange differences
(2,196)
(205)
(2,401)
As at December 31, 2024
(45,838)
(8,023)
(53,861)
Carrying amounts as at December 31, 2024
269,830
5,092
274,922
Land
Other
Total
Cost
As at January 1, 2023
272,658
11,449
284,107
Additions
21,855
2,558
24,413
Business acquisition
(1,322)
(1,322)
Dispositions
—
(358)
(358)
Other changes
2,907
(837)
2,070
Net foreign exchange differences
(4,531)
(71)
(4,602)
As at December 31, 2023
291,567
12,741
304,308
Accumulated depreciation
As at January 1, 2023
(24,887)
(4,952)
(29,839)
Depreciation
(9,444)
(1,552)
(10,996)
Business dispositions
162
162
Dispositions
—
358
358
Net foreign exchange differences
394
37
431
As at December 31, 2023
(33,776)
(6,109)
(39,885)
Carrying amounts as at December 31, 2023
257,791
6,632
264,423
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p122
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
14. INTANGIBLES ASSETS
Hydroelectric
facilities
Wind farm
facilities
Solar facilities
Total
Cost
As at January 1, 2024
779,659
961,436
188,593
1,929,688
Additions
4,555
—
—
4,555
Other changes1
969
—
—
969
Net foreign exchange
20,002
54,043
1,608
75,653
As at December 31, 2024
805,185
1,015,479
190,201
2,010,865
Accumulated amortization
As at January 1, 2024
(339,934)
(291,061)
(25,634)
(656,629)
Amortization
(59,805)
(70,932)
(23,542)
(154,279)
Net foreign exchange
(10,913)
(12,832)
(697)
(24,442)
As at December 31, 2024
(410,652)
(374,825)
(49,873)
(835,350)
Carrying amounts as at
December 31, 2024
394,533
640,654
140,328
1,175,515
1.
Includes remeasurements of the future ownership rights of $969.
Hydroelectric
facilities
Wind farm
facilities
Solar facilities
Total
Cost
As at January 1, 2023
781,120
972,697
29,663
1,783,480
Additions
2,113
—
—
2,113
Business acquisitions
—
—
160,691
160,691
Business dispositions
—
—
(1,317)
(1,317)
Reclassification
(1,694)
—
—
(1,694)
Other changes
3,582
—
—
3,582
Net foreign exchange
(5,462)
(11,261)
(444)
(17,167)
As at December 31, 2023
779,659
961,436
188,593
1,929,688
Accumulated amortization
As at January 1, 2023
(284,504)
(222,581)
(7,435)
(514,520)
Amortization
(59,315)
(69,365)
(18,384)
(147,064)
Business dispositions
—
—
63
63
Reclassification
1,694
—
—
1,694
Net foreign exchange
2,191
885
122
3,198
As at December 31, 2023
(339,934)
(291,061)
(25,634)
(656,629)
Carrying amounts as at
December 31, 2023
439,725
670,375
162,959
1,273,059
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p123
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
15. PROJECT DEVELOPMENT COSTS
As at
December 31, 2024
December 31, 2023
Beginning of year
34,255
41,151
Additions
5,457
7,267
Dispositions
—
(13,632)
Net foreign exchange
2,903
(531)
End of year
42,615
34,255
16. GOODWILL
Allocation of goodwill to each significant CGU or group of CGUs is as follows:
Hydroelectric
facilities
Wind farm
facilities
Solar facilities
Total
As at January 1, 2024
20,291
126,296
30,021
176,608
Impairment
—
(44,567)
—
(44,567)
Net foreign exchange
—
6,725
—
6,725
As at December 31, 2024
20,291
88,454
30,021
138,766
Hydroelectric
facilities
Wind farm
facilities
Solar facilities
Total
As at January 1, 2023
20,291
119,385
—
139,676
Business acquisition
—
8,025
30,021
38,046
Net foreign exchange
—
(1,114)
—
(1,114)
As at December 31, 2023
20,291
126,296
30,021
176,608
On December 31, 2024, the Corporation conducted its annual goodwill impairment tests.
The recoverable amount of each CGU is the higher of their respective fair value less costs to sell, and their value in use,
which are calculated using discounted cash flow models with cash flow projections based on financial budgets approved
by management until the end of the estimated life of the site(s) composing each CGU, and applicable discount rates of
6.1% to 8.2% (4.0% to 10.0% in 2023).
Key assumptions used to determine the recoverable amount of assets are the following:
•
The discount rate considers the weighted average between the consolidated cost of debt and the consolidated cost
of equity, adjusted with alpha factors specific to each operating segment and country in which the facility operates,
and risks relating to the facility itself.
•
The forecasted selling price of electricity once the power purchase agreements are renewed or on the spot market.
•
The future expected cash flows are based on the budgets before debt service and income tax of each cash-
generating unit. The budgets have been built using long-term averages of forecasted production. These long-term
averages are expected to approximate actual results.
Based on the impairment tests, the carrying value of the Aela wind facilities, located in Chile, exceeded their estimated
recoverable amount of US$572,370 ($823,296), resulting in an impairment charge of US$31,900 ($44,567), reflecting
mainly an increase in the reference rates used in the calculation of the discount rates. The measurement of the
recoverable amount was categorized as a Level 3 fair value based on the inputs in the valuation technique used. The
recoverable amount was calculated using fair value less costs to sell with an 8.2% discount rate based on the industry
weighted-average cost of capital.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p124
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Sensitivities
A change of 25 basis points in discount rates would have increased (decreased) the impairment charge by the amounts
shown below. This analysis assumes that all other variables remain constant.
25 bps increase
25 bps decrease
Impairment of long-term assets
16,536
(16,011)
17. OTHER LONG-TERM ASSETS
As at
December 31, 2024
December 31, 2023
Hydrology/ wind power reserve1
37,108
33,572
Major maintenance reserve1
2,135
1,759
Other reserves
22,931
17,903
Security deposits
5,738
7,986
Investments in preferred shares of equity-accounted investees
21,859
21,859
Production tax credits recoverable
15,142
—
Other
12,764
12,347
117,677
95,426
1.
The availability in the reserve accounts is restricted by credit agreements.
Other long-term assets include security deposits under various agreements, and prepaid royalty fees, reserves, long-
term receivables and long-term investments that are not investments in joint ventures and associates.
The Corporation holds two types of reserve accounts designed to help ensure its financial stability. The first is the
hydrology/wind power reserve established at the start of commercial operations of a facility to compensate for the
variability of cash flows related to fluctuations in hydrology or wind conditions as well as other unpredictable events,
which also includes dismantlement reserve aiming to have sufficient funding available for the decommissioning of wind
farms at the end of the projects. The second is the major maintenance reserve established in order to prefund any
major plant repairs that may be required to maintain the Corporation's generating capacity.
The reserve accounts are currently invested in cash or in short-term investments having maturities of a year or less as
well as in government-backed securities.
18. ACCOUNTS PAYABLES AND OTHER PAYABLES
As at
December 31, 2024
December 31, 2023
Trade and other payables
146,158
149,148
Construction holdbacks
39,026
29,637
Interest payable
38,609
32,978
Dividends payable to shareholders
19,691
38,186
Salaries and benefits
16,263
15,866
Commodity taxes
7,233
9,458
Income taxes payable
7,729
5,109
274,709
280,382
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p125
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
19. LONG-TERM LOANS AND BORROWINGS
Currency
Interest rates1
Maturity
December 31, 2024
December 31, 2023
Corporate indebtedness
Revolving term credit facility (a)
CAD
4.44 %
2029
241,994
473,725
Alterra loans
CAD
5.05 % 2028-2031
175,000
175,000
Corporate bridge loans (b)
USD-CAD
6.00 % 2025-2026
168,840
—
Subordinated unsecured term loan
CAD
6.06 %
2025
150,000
150,000
735,834
798,725
Convertible debentures
4.75% Convertible Debentures4
CAD
4.75 %
2025
146,027
146,027
4.65% Convertible Debentures5
CAD
4.65 %
2026
141,516
139,078
287,543
285,105
Tax equity financing2,3
Wind segment
Foard City
USD
7.50 %
20296
189,748
206,284
Griffin Trail
USD
6.80 %
20316
138,971
141,695
Solar Segment
Hillcrest
USD
5.15 %
20286
16,682
19,515
Phoebe
USD
7.14 %
20266
12,959
15,606
358,360
383,100
Project-level indebtedness
Chile green bonds
USD
6.28 %
2036
1,021,264
939,046
Hydroelectric segment
Upper Lillooet
CAD
4.37 % 2042-2056
475,882
482,748
Harrison Operating Facilities
CAD
5.04 %
2049
440,133
447,184
Hydro Finance (c)
CAD
5.91 % 2038-2043
287,390
179,915
Big Silver Creek
CAD
4.71 % 2041-2056
192,321
192,988
Kwoiek Creek
CAD
5.19 % 2052-2054
157,066
159,416
Ashlu Creek (d)
CAD
5.54 %
2039
133,676
69,525
Tretheway Creek
CAD
4.99 %
2055
90,962
91,500
Northwest Stave River
CAD
5.30 %
2053
69,417
70,533
Sainte-Marguerite
CAD
7.97 % 2025-2064
44,554
48,253
Magpie
CAD
7.31 % 2025-2031
30,363
33,636
Fitzsimmons Creek
CAD
4.95 %
2026
16,635
17,194
Guayacán
USD
7.04 %
2032
11,222
10,985
Others
USD
8.45 %
2025
2,661
4,894
Wind segment
Innergex Cartier Energie
CAD
4.45 %
2032
309,232
356,817
Mesgi'g Ugju's'n (e)
CAD
4.19 % 2026-2036
247,314
196,333
Boswell (f)
USD
5.62 %
2025
805,019
497,599
Mountain Air
USD
5.50 % 2029-2032
139,886
139,687
Foard City
USD
3.91 %
2026
—
14,323
Innergex France
EURO
5.67 %
2033
82,540
81,079
Yonne and Yonne II
EURO
1.35 % 2031-2039
75,534
81,804
Rougemont 2
EURO
3.05 %
2035
55,882
60,180
Vaite
EURO
2.94 %
2035
49,404
53,669
Rougemont 1
EURO
3.00 %
2035
48,643
52,521
Plan Fleury
EURO
1.65 % 2032-2034
30,143
33,450
Les Renardières
EURO
1.70 % 2032-2034
26,412
29,371
Beaumont
EURO
2.57 % 2027-2031
15,844
18,331
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p126
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
(continued)
Currency
Interest rates
Maturity
December 31, 2024
December 31, 2023
Montjean
EURO
1.33 % 2026-2031
12,083
13,940
Theil Rabier
EURO
1.33 % 2026-2031
12,083
13,940
Others
EURO
2.93 % 2025-2030
29,275
39,105
Solar segment
Sault Ste. Marie
CAD
3.40 %
2026
127,688
146,301
Stardale
CAD
5.10 %
2032
67,893
70,471
Hillcrest
USD
2.66 %
2028
84,353
81,827
San Andrés
USD
6.67 %
2025
61,071
32,140
Phoebe
USD
5.06 %
2026
—
128,764
5,253,845
4,889,469
Total long-term loans and borrowings
6,635,582
6,356,399
Deferred financing costs
(73,214)
(75,252)
6,562,368
6,281,147
Current portion of long-term loans and
borrowings
(604,042)
(248,878)
Long-term loans and borrowings
5,958,326
6,032,269
1.
The interest rates include the effects of the hedging instruments. As at December 31, 2024, excluding the construction financing
of the Boswell Springs wind project, which is subject to a forward-starting interest rate swap, approximately 94.2% of the
Corporation's total long-term loans and borrowings was either fixed or hedged. Refer to Note 26 a) (i) – Interest Rate Risk.
2.
The interest rates reflect the internal rate of return required by the respective tax equity investors.
3.
The maturity date of these obligations are driven by the dates on which the tax equity investor reaches the agreed upon target
rate of return.
4.
The 4.75% Convertible Debentures are convertible at the holder’s option into common shares of the Corporation at a conversion
price of $20.00 per share.
5.
The 4.65% Convertible Debentures are convertible at the holder’s option into common shares of the Corporation at a conversion
price of $22.90 per share.
6.
Represents the expected Flip Point date as estimated at the date of final funding from the tax equity investor. Actual Flip Point
date may differ, subject to the facilities' respective operating performance.
The carrying amount of assets pledged to secure the loans totaled $6,675,108 ($6,087,083 in 2023).
Letters of credit under revolving term credit facility and project loans amount to $490,989 ($439,019 in 2023). Moreover,
the Corporation has access to a letter of credit facility guaranteed by Export Development Canada ("EDC"). On
March 27, 2024, the Corporation increased by $50,000 its existing letter of credit facility guaranteed by Export
Development Canada ("EDC"), up to an amount of $250,000. As of December 31, 2024, letters of credit have been
issued for an amount of $217,505.
Tax equity investors in U.S. wind projects generally require sponsor guarantees as a condition to their investment. To
support the tax equity investments, the Corporation executed guarantees indemnifying the tax equity investors against
certain breaches of project level representations, warranties and covenants and other events. The Corporation believes
these indemnifications cover matters which are substantially under its control, and are very unlikely to occur.
As at December 31, 2024, the Corporation and its subsidiaries have met all material financial and non-financial
conditions related to their credit agreements.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p127
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
a) Corporate Indebtedness
Revolving term credit facility
The Corporation has access to a revolving term credit facility maturing in 2029, as amended on October 21, 2024. The
available facility amount is $950,000. The facility has covenants requiring a minimum interest coverage and a maximum
debt coverage ratios. The applicable interest rate on this revolving credit facility is variable, based on the bank’s prime
rate, bankers’ acceptance rates, US Base Rate, SOFR or EURIBOR plus a spread which depends on interest coverage
ratio and leverage ratio. As of December 31, 2024, an amount of $2,372 has been used to issue letters of credit.
b) Corporate Bridge Loan
On December 16, 2024, the Corporation entered into a US$100,000 ($143,839) bridge financing agreement to repay
the draws made on the revolving term credit facility related to the Hale Kuawehi solar and battery storage project in
Hawaii. The loan bears interest at 3-month SOFR + 2.50% and matures in 2026.
On December 17, 2024, the Corporation closed a $25,000 senior secured non revolving term credit facility. The credit
facility bears interest at a variable rate, based on the CORRA rate plus a spread which depends on debt to adjusted
EBITDA ratio.
c) Hydro Finance
On November 4, 2024, the Corporation amended the non-recourse project financing, increasing the facility by an
additional $112,631 including a $107,475 term loan facility bearing an effective interest rate between 5.30% and 5.69%,
and a $5,156 reserve, to finance the unlevered Portneuf hydroelectric facilities. The term loan facility comprises a
$38,567 tranche set to mature in 2040, and a $68,908 tranche set to mature in 2043.
d) Ashlu Creek
On December, 16 2024, the Corporation closed a $139,276 non-recourse project financing, including a $133,676 term
loan facility bearing an effective interest rate of 5.54%, and a $5,600 reserve facility maturing in 2039, to finance the
Ashlu Creek hydroelectric facility.
e) Mesgi'g Ugju's'n
On December, 16 2024, the Corporation closed a $71,051 non-recourse project financing, including a $42,318 term
loan facility bearing an effective interest rate of 5,93%, a $22,980 loan facility bearing a variable interest rate of CORRA
plus an applicable credit margin, and a $5,753 letter of credit facility.
f) Boswell PTC Bridge Loan
On December 24, 2024, the Corporation amended the construction financing of the Boswell Springs wind project,
increasing the facility by an additional US$30,000 ($43,152) bearing interest at 1-month SOFR + 1% and maturing in
2025.
Subsequent to year-end, on February 18, 2025, the construction loan was converted into a US$203,268 ($287,949)
backleverage term loan carrying an interest rate of 6-month SOFR + 1.38% (approximately 5.00% fixed through an
interest rate swap), amortizing over 28 years, with an initial 10-year maturity. Concurrently, the US$322,660 ($457,080)
tax equity bridge loan was reimbursed with the proceeds from the tax equity financing. Refer to Note 31 – Subsequent
Events for additional information.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p128
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
20. OTHER LIABILITIES
Contingent
considerations
Asset
retirement
obligations
Interest
payable on
SM S.E.C.
debenture
Future
ownership
rights
Deferred
income
Lease
liabilities
Total
As at January 1, 2024
34,077
143,679
41,633
24,400
22,173
280,995
546,957
New obligations
—
3,773
—
—
2,392
—
6,165
Interest expense included
in finance costs
—
—
5,769
—
—
—
5,769
Accretion expense
included in finance costs
3
7,617
—
1,242
—
—
8,862
Remeasurement
—
(3,958)
—
969
—
5,002
2,013
Payments
(398)
—
—
—
—
(6,067)
(6,465)
Impact of foreign
exchange fluctuations
2,948
4,646
—
—
—
18,625
26,219
As at December 31, 2024
36,630
155,757
47,402
26,611
24,565
298,555
589,520
Current portion of other
liabilities
(31,380)
—
—
—
—
(6,491)
(37,871)
Long-term portion of other
liabilities
5,250
155,757
47,402
26,611
24,565
292,064
551,649
Contingent
considerations
Asset
retirement
obligations
Interest
payable on
SM S.E.C.
debenture
Future
ownership
rights
Deferred
income
Lease
liabilities
Total
As at January 1, 2023
11,233
118,701
36,249
19,700
17,903
265,827
469,613
Business acquisitions
—
1,463
—
—
—
—
1,463
Business dispositions
—
—
—
—
—
(1,290)
(1,290)
New obligations
—
5,462
—
—
4,270
24,413
34,145
Interest expense included
in finance costs
—
—
5,384
—
—
—
5,384
Accretion expense
included in finance costs
16
6,942
—
1,118
—
—
8,076
Remeasurement
25,563
12,128
—
3,582
—
2,070
43,343
Payments
(1,622)
—
—
—
—
(5,513)
(7,135)
Impact of foreign
exchange fluctuations
(1,113)
(1,017)
—
—
—
(4,512)
(6,642)
As at December 31, 2023
34,077
143,679
41,633
24,400
22,173
280,995
546,957
Current portion of other
liabilities
(257)
—
—
—
—
(6,150)
(6,407)
Long-term portion of other
liabilities
33,820
143,679
41,633
24,400
22,173
274,845
540,550
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p129
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
a) Asset retirement obligations
Asset retirement obligations primarily arise from obligations to retire wind farms, the solar facilities and storage
facilities upon expiry of the site leases. The wind farms and solar facilities were constructed on sites held under
leases expiring, after exercising its term renewal options, at least 30 and 35 years, respectively, after the signing
date.
The cash flows were discounted at rates between 3.49% and 7.30% as at December 31, 2024 (3.52% to 7.17% in
2023) to determine the obligations.
b) Interest payable on the Sainte-Marguerite debenture
This debenture carries an interest rate of 8.00%; it has no predetermined repayment schedule and matures in
2064. The partner, Régime de Rentes du Mouvement Desjardins, is considered a related party. Unpaid interests
are compounded and are recorded in other long-term liabilities.
c) Future ownership rights
Other liabilities include various liabilities related to future ownership rights owned by First Nations for the Upper
Lillooet River, Boulder Creek, Big Silver Creek and Tretheway Creek facilities, the counterpart of which is
capitalized into the intangible assets.
d) Lease liabilities
The Corporation enters into various leases for the conduct of its operations. The main portion of the leases relate to
the right of use of land, mainly for the Corporation's installed wind turbines and solar panels. The land leases run
for various number of years, with subsequent options to renew, which the Corporation expects to exercise up to its
projects' respective expected useful lives. The majority of leases provide for additional rent payments that are
based on changes in local price indices.
e) Mesgi'g Ugju's'n letter of credit
During 2021, the Corporation availed itself of the full amount under a $19,642 letter of credit to cover certain
unfulfilled performance obligations following the bankruptcy of the service provider under the turbine supply
agreement at Mesgi'g' Ugju's'n. The proceeds are subject to restrictions under the Mesgi'g Ugju's'n credit
agreement and as such, have been recognized as other long-term assets and the associated obligation as other
non-current liabilities. The proceeds are to be used in the future to remediate the unfulfilled performance obligations
under the turbine supply agreement.
f)
Contingent considerations
On July 9, 2021, Innergex acquired the remaining 50% interest in Energía Llaima SpA (“Energía Llaima”). The
purchase price included a contingent consideration calculated on the fair value of the lands owned by Inversiones
La Frontera Sur SpA and Inversiones San Carlos SpA at the date of acquisition. The contingent consideration is to
be paid within five to six years following the closing of the acquisition.
On October 25, 2021, Innergex and HQI US Holding LLC, a subsidiary of Hydro-Québec, acquired the Curtis
Palmer hydroelectric portfolio located in Corinth, New York. The purchase price included a contingent consideration
provision, based on the evolution of the New York Independent System Operator ("NYISO") market pricing during
calendar years 2023 and 2024, limited to US$30,000. The contingent consideration is payable in 2025.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p130
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
21. SHAREHOLDERS' CAPITAL
Authorized
The authorized capital of the Corporation consists of an unlimited number of common shares and an unlimited number
of preferred shares, non-voting, retractable and redeemable. This includes up to 3,400,000 Cumulative Rate Reset
Preferred Shares, Series A (the "Series A Preferred Shares"), up to 3,400,000 Cumulative Floating Rate Preferred
Shares, Series B (the "Series B Preferred Shares") and up to 2,000,000 Cumulative Redeemable Fixed Rate Preferred
Shares, Series C (the ''Series C Preferred Shares'').
Issued and outstanding shares
As at
December 31, 2024
December 31, 2023
Number of common shares
203,125,034
204,321,381
Number of Series A Preferred Shares
3,400,000
3,400,000
Number of Series C Preferred Shares
2,000,000
2,000,000
a) Common shares
The change in the number of common shares was as follows:
As at
December 31, 2024
December 31, 2023
Issued and fully paid
Beginning of the year
204,321,381
204,132,833
Issued through dividend reinvestment plan
80,355
188,548
Buybacks
(1,276,702)
—
End of year
203,125,034
204,321,381
Held in trust under the Performance Share Plan
Beginning of the year
(713,732)
(592,257)
Purchased
(633,544)
(185,410)
Distributed
—
63,935
End of year
(1,347,276)
(713,732)
Common shares outstanding at end of the year
201,777,758
203,607,649
Normal Course issuer Bid
The Corporation received approval from the Toronto Stock Exchange ("TSX") to proceed with a normal course issuer
bid on its common shares (the "Bid"). Under the Bid, the Corporation could purchase for cancellation up to 10,220,086
of its common shares, representing approximately 5.0% of the 204,401,736 issued and outstanding common shares of
the Corporation as at February 21, 2024. The Bid commenced on February 26, 2024, and will terminate on
February 25, 2025.
b) Preferred shares
Series A Preferred Shares
The holders of Series A Preferred Shares are entitled to receive fixed cumulative preferential cash dividends, as and
when declared by the Board of Directors. The dividends are payable quarterly on the 15th day of January, April, July
and October each year. The annual dividend rate for the five-year period starting January 15, 2021, equals $0.8110 per
share.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p131
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
At its option, each holder of Series A Preferred Shares has the right to convert all or any of its Series A Preferred Shares
into the Series B Preferred Shares of the Corporation on the basis of one Series B Preferred Share for each Series A
Preferred Share converted, subject to certain conditions, on January 15, 2021, and every five years thereafter. In
addition, the Corporation has the right to redeem all or any number of the outstanding Series A Preferred Shares on
January 15, 2021, and every five years thereafter.
Series B Preferred Shares
The holders of Series B Preferred Shares will be entitled to receive floating rate cumulative preferential cash dividends
as and when declared by the Board of Directors. The dividends will be payable quarterly in an annual amount per
Series B Preferred Share equal to the Treasury Bill rate for the preceding quarterly period plus 2.79% per annum
determined on the 30th day prior to the first day of the applicable quarterly floating rate period multiplied by $25.00.
Series C Preferred Shares
The holders of Series C Preferred Shares are entitled to receive fixed cumulative preferential cash dividends, as and
when declared by the Board of Directors. The dividends are payable quarterly on the 15th day of January, April, July
and October each year at an annual rate equal to $1.4375 per share. The Corporation has the right to redeem all or any
number of the outstanding Series C Preferred Shares.
Equity-based compensation
a) Stock option plan
The Corporation has a stock option plan providing for the granting of options by the Board of Directors to employees,
officers, directors and certain consultants of the Corporation and its subsidiaries to purchase common shares. Options
granted under the stock option plan will have an exercise price of not less than the market price of the common shares
at the date of grant of the option, calculated as the volume weighted average trading price of the common shares on the
Toronto Stock Exchange for the five trading days immediately preceding the date of grant. The maximum number of
common shares of the Corporation available for issuance pursuant to options granted under the share option plan is
4,064,123. Any common shares subject to an option that expires or terminates without having been fully exercised may
be subject to a further option. The number of common shares issuable to non-executive directors of the Corporation
under the stock option plan cannot at any time exceed 1% of the issued and outstanding common shares. Options must
be exercised during a period established by the Board of Directors, which may not be greater than 10 years after the
date of grant. Options granted under the stock option plan vest in equal amounts on a yearly basis over a period of four
to five years following the grant date.
December 31, 2024
December 31, 2023
Number of options
Weighted average
exercise price ($)
Number of options
Weighted average
exercise price ($)
Outstanding - beginning of year
289,111
16.81
284,769
16.75
Granted during the year
120,386
7.64
60,873
15.08
Cancelled during the year
(87,277)
15.61
(56,531)
14.65
Outstanding - end of year
322,220
13.71
289,111
16.81
Options exercisable - end of year
122,792
17.99
173,015
16.49
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p132
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
The following options were outstanding as at December 31, 2024:
Year of granting
Number of options
outstanding
Exercise price ($)
Number of options
exercisable
Year of maturity
2019
52,593
14.41
52,593
2026
2020
34,926
20.52
34,926
2027
2021
22,314
24.49
16,736
2028
2022
37,073
17.50
18,537
2029
2023
54,928
15.08
—
2030
2024
120,386
7.64
—
2031
322,220
122,792
A compensation expense of $22 was recorded during the year ended December 31, 2024, with respect to the stock
option plan ($59 in 2023).
Granted
During the year ended December 31, 2024, 120,386 options were granted. The options granted vest in three equal
tranches from February 24, 2026, to February 24, 2028 and must be exercised before February 24, 2031 at an exercise
price of $7.64.
Fair value is determined at the date of the grant and each tranche is recognized on a graded-vesting basis over the
period during which the options vest and is measured using the Black-Scholes pricing model taking into account the
terms and conditions upon which the options were granted.
The following assumptions were used to estimate the fair value of the options issued to grantees during the year:
December 31, 2024
December 31, 2023
Risk-free interest rate
3.59 %
3.46 %
Expected annual dividend per common share
$
0.36
$
0.72
Expected life of options
6
6
Expected volatility
30.71 %
27.94 %
Expected volatility is estimated by considering historic average share price volatility of the Corporation.
b) Performance Share Plan (the ''PSP'') and Deferred Share Unit Plan (the “DSU”)
Performance Share Plan
During the year ended December 31, 2024, 794,370 share rights were granted. The performance share rights vest on
December 31, 2026.
In addition, 164,716 performance share rights vested during the year ended December 31, 2024.
The goal of the PSP is to motivate the key employees and officers to create long-term economic value for the
Corporation and its shareholders. This portion of the Equity-Based Incentive Plan focuses key employees and officers
on delivering business performance over the next three years against the total shareholder value and relative to a peer
group. The award is paid out at the end of the three years, depending on how well the Corporation performed against
targets set at the beginning of the three-year period.
The vesting date of the performance share rights is determined on the grant date which shall not exceed three years
thereafter. The fair value of the performance share rights is determined on the grant date, based on the Corporation's
estimate of the number of performance share rights that will eventually vest. On the vesting date, each performance
share right entitles its holder to one Common Share of the Corporation with all the reinvested dividends accrued thereon
from the grant date, such dividend being either paid in cash, in shares or in a combination of both at the sole discretion
of the Corporation.
From time to time, the Corporation provides instructions to a trustee under the terms of a Trust Agreement to purchase
common shares of the Corporation in the open market in connection with the PSP. These shares are held in Trust for
the benefit of the beneficiaries until the Performance share rights become vested or cancelled. The cost of these
purchases has been deducted from share capital.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p133
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Deferred Share Unit Plan
During the year ended December 31, 2024, 132,006 units were granted.
Under the Corporation’s DSU, directors receive a portion of their compensation in DSUs in lieu of cash compensation.
Officers may elect to receive all or a portion of their bonus in DSU in lieu of cash compensation. A DSU is a unit that has
a value based upon the value of one Common Share. When a dividend is paid on Common Shares, the director’s and
the officer's DSU account is credited with additional DSUs equivalent to the dividend paid.
DSUs cannot be redeemed for cash or shares until the director or the officer leaves the Corporation. DSUs are not
shares, cannot be converted to shares, and do not carry voting rights. DSUs received by directors and officers in lieu of
cash compensation and held by them represent an at-risk investment in the Corporation. The value of DSUs is based
on the value of the Common Shares, and therefore is not guaranteed.
Summary
December 31, 2024
December 31, 2023
PSP
DSU
PSP
DSU
Balance beginning of year
717,941
294,746
531,351
215,612
Granted during the year
794,370
132,006
325,708
62,219
Vested during the year
(164,716)
(59,469)
(145,001)
—
Expired during the year
(113,769)
—
(40,177)
—
Dividend reinvestment during the year
53,008
15,070
46,060
16,915
Balance end of year
1,286,834
382,353
717,941
294,746
A compensation expense of $4,019 was recorded during the year ended December 31, 2024, with respect to the PSP
and DSU plans ($2,400 in 2023).
Dividends
a) Dividend Reinvestment Plan (''DRIP'')
The Corporation implemented a DRIP for its shareholders. The plan allows eligible common shareholders the
opportunity to reinvest a portion or all of the dividends they receive to purchase additional common shares of the
Corporation, without paying fees such as brokerage commissions and service charges. Shares will either be purchased
on the open market or issued from treasury. During the year ended December 31, 2024, 80,355 shares (188,548 shares
in 2023) were issued from treasury under the DRIP.
b) Dividend Declared
The following dividends were declared by the Corporation:
Year ended December 31
2024
2023
($/share)
Total
($/share)
Total
Dividends declared on common shares
0.3600
73,219
0.7200
147,058
Dividends declared on Series A preferred shares
0.8110
2,757
0.8110
2,757
Dividends declared on Series C preferred shares
1.4375
2,875
1.4375
2,875
Dividend declared subsequent to period end and not recognized at the end of the reporting period.
The following dividends will be paid by the Corporation on April 15, 2025:
Date of
announcement
Record date
Payment date
Dividend per
common share
Dividend per Series
A Preferred Share
Dividend per Series
C Preferred Share
February 20, 2025
March 31, 2025
April 15, 2025
$
0.0900 $
0.2028 $
0.3594
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p134
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
22. ACCUMULATED OTHER COMPREHENSIVE INCOME
Foreign currency
translation
differences for
foreign operations
Changes in fair
value of financial
instruments
designated as net
investment hedges
Cash flow hedge -
interest rate and
power price risks
Share of cash
flow hedge of joint
ventures and
associates -
interest rate and
power price risks
Total
Balance as at January 1, 2024
20,336
(5,853)
117,372
1,035
132,890
Investments from non-controlling interests (Note 24)
(202)
—
(11,179)
—
(11,381)
Exchange differences on translation of foreign operations
128,900
—
—
—
128,900
Hedging loss
—
(3,624)
(25,095)
(1,111)
(29,830)
Share of non-controlling interest
(27,681)
—
2,016
—
(25,665)
Related deferred tax expense
—
—
4,400
953
5,353
Balance as at December 31, 2024
121,353
(9,477)
87,514
877
200,267
Foreign currency
translation
differences for
foreign operations
Changes in fair
value of financial
instruments
designated as net
investment hedges
Cash flow hedge -
interest rate and
power price risks
Share of cash
flow hedge of joint
ventures and
associates -
interest rate and
power price risks
Total
Balance as at January 1, 2023
43,011
(1,323)
151,240
3,742
196,670
Business dispositions
(1,133)
—
(948)
—
(2,081)
Investments from non-controlling interest
1,021
—
(3,247)
—
(2,226)
Exchange differences on translation of foreign operations
(26,572)
—
—
—
(26,572)
Hedging loss
—
(4,530)
(40,844)
(3,705)
(49,079)
Share of non-controlling interest
3,677
—
2,001
—
5,678
Buyback of non-controlling interests
332
—
—
—
332
Related deferred tax expense
—
—
9,170
998
10,168
Balance as at December 31, 2023
20,336
(5,853)
117,372
1,035
132,890
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p135
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
23. ADDITIONAL INFORMATION TO THE CONSOLIDATED STATEMENTS OF
CASH FLOWS
a) Changes in non-cash operating items
Year ended December 31
2024
2023
Accounts receivable
(109)
(44,108)
Prepaids and other
17,660
(11,443)
Accounts payable and other payables
(14,800)
22,150
Change in production tax credit recoverable
(17,370)
—
Change in tax equity liabilities
(2,254)
—
(16,873)
(33,401)
b) Additional information
Year ended December 31
2024
2023
Finance costs paid relative to operating activities before interest on
leases
(268,410)
(274,538)
Interest on leases paid relative to operating activities
(9,145)
(9,849)
Finance costs paid relative to investing activities before interest on
leases
(43,387)
(19,511)
Interest on leases paid relative to investing activities
(1,967)
(1,164)
Total finance costs paid
(322,909)
(305,062)
Non-cash transactions:
Change in unpaid property, plant and equipment
2,593
7,126
Investment tax credits
65,664
(9,201)
Change in other long-term assets
(159)
(204)
Change in unpaid project development costs
1,493
(1,220)
Remeasurement of other liabilities
2,013
17,779
Initial measurement of other liabilities
3,773
29,876
Common shares issued through equity based compensation
—
1,991
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p136
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
c) Changes in liabilities arising from financing activities
Year ended December 31
2024
2023
Changes in long-term loans and borrowings
Long-term loans at beginning of period
6,281,147
5,759,210
Business dispositions
—
(16,108)
Increase in long-term debt
1,028,027
1,485,589
Repayment of long-term debt
(944,570)
(1,025,345)
Payment of deferred financing costs
(10,423)
(16,444)
Business acquisitions
—
164,262
Tax attributes
(1,195)
(1,776)
Production tax credits
(70,397)
(71,684)
Change in tax equity liabilities related to operating activities
(2,254)
—
Other non-cash finance costs
50,334
58,164
Net foreign exchange differences
231,699
(54,721)
Long-term loans and borrowings at end of period
6,562,368
6,281,147
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p137
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
24. NON-WHOLLY-OWNED SUBSIDIARIES
Name of subsidiaries
Place of
creation and
operation
Proportion of ownership
interests and voting
rights held by non-
controlling interests
Earnings (loss) allocated
to non-controlling
interests for the year
ended
Non-controlling
interests (deficit)
December 31
December 31
December 31
2024
2023
2024
2023
2024
2023
Harrison Hydro L.P. and
its subsidiaries
Canada
49.99 %
49.99 %
(1,742)
(8,961)
8,448
10,190
Kwoiek Creek
Resources, L.P.1,2
Canada
50.00 %
50.00 %
38
(2,970)
(20,758)
(20,796)
Mesgi'g Ugju's'n (MU)
Wind Farm L.P.1,2
Canada
50.00 %
50.00 %
9,783
9,178
(5,181)
(5,193)
Innergex Sainte-
Marguerite, S.E.C.
Canada
49.99 %
49.99 %
(3,666)
(3,241)
(25,601)
(21,935)
Innergex France S.A.S,
and its subsidiaries3
Europe
30.00 %
30.00 %
(1,583)
1,795
4,982
6,160
Innergex HQI USA LLC,
and its subsidiaries2
United States
50.00 %
50.00 %
5,222
(2,530)
133,722
147,639
Foard City Holdings,
LLC4
United States
22.20 %
—
667
—
63,607
—
Griffin Trail Wind, LLC4
United States
49.90 %
—
3,120
—
109,107
—
Phoebe Energy Project,
LLC4
United States
49.90 %
—
1,215
—
119,724
—
Others
Various
Various
Various
(2,460)
(634)
4,984
2,380
10,594
(7,363)
393,034
118,445
1.
The Corporation owns more than 50% of the economic interest in the subsidiary.
2.
Based on the terms of agreements under which these entities were established, the Corporation is exposed to, and has right to,
variable returns from its involvement with the investee, and has the current ability to direct these entities's activities that most
significantly affect the returns.
3.
On October 26, 2023, the Corporation disposed of a 30% non-controlling interest in Innergex France S.A.S.
4.
On June 20, 2024, the Corporation disposed of a 49.9% non-controlling interest in the Phoebe and Griffin Trail facilities, and a
22.2% non-controlling interest in the Foard City facility.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p138
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Investment from non-controlling interests in Innergex's portfolio in Texas
On June 20 2024, the Corporation has completed a partnership with Irradiant Partners, LP ("Irradiant"), an investment
manager headquarted in Los Angeles (U.S.), for a non-controlling interest investment in its 826 MW renewable energy
portfolio in Texas ("Texas Portfolio Transaction"). The Corporation has sold to Irradiant 49.9% of the Phoebe and Griffin
Trail facilities and 22.2% of the Foard City facility for a total cash consideration of US$185,667 ($253,039). Net
proceeds from the transaction were primarily used as follows:
USD
CAD
Consideration received
185,667
253,039
Transaction costs
(2,982)
(4,283)
Consideration received, net of transaction costs
182,685
248,756
Repayment of project debts
(107,896)
(147,482)
Settlement of interest rate swaps
6,802
9,299
Settlement of the Phoebe power hedge
(54,500)
(74,496)
Repayment of the Phoebe tracking account
(11,705)
(16,000)
Net cash inflow to the Corporation
15,386
20,077
In connection with this transaction, the Corporation recognized an amount of $280,428 under non-controlling interests,
and an increase in equity attributable to owners, net of income tax, of $34,344, as follows:
Year ended
December 31, 2024
Consideration received
253,039
Transaction costs
(4,284)
Consideration received, net of transaction costs
248,755
Carrying amount of the investments sold
280,428
Income tax recovery
(66,017)
Increase in equity attributable to owners, net of income tax
34,344
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p139
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Summarized financial information in respect of each of the Corporation's subsidiaries that has material non-controlling interests is set out below. The summarized
financial information below represents amounts before intragroup eliminations.
Year ended December 31, 2024
Harrison
Kwoiek
Mesgi'g
Ugju's'n
Sainte-
Marguerite
Innergex
France
Innergex
HQI USA
Foard City
(185-day
period)
Griffin Trail
(185-day
period)
Phoebe
(185-day
period)
Summary Statements of Earnings (Loss) and
Comprehensive Income (Loss)
Revenues and Production Tax Credits
51,980
22,132
55,283
9,139
98,676
68,222
28,708
23,688
13,607
Expenses
55,466
22,056
30,785
16,469
103,936
57,778
25,705
17,437
11,172
Net (loss) earnings
(3,486)
76
24,498
(7,330)
(5,260)
10,444
3,003
6,251
2,435
Other comprehensive (loss) income
—
—
(972)
—
1,352
23,024
14,060
10,706
10,077
Total comprehensive (loss) income
(3,486)
76
23,526
(7,330)
(3,908)
33,468
17,063
16,957
12,512
Net (loss) earnings attributable to:
Owners of the parent
(1,744)
38
14,715
(3,664)
(3,677)
5,222
2,336
3,131
1,220
Non-controlling interests
(1,742)
38
9,783
(3,666)
(1,583)
5,222
667
3,120
1,215
(3,486)
76
24,498
(7,330)
(5,260)
10,444
3,003
6,251
2,435
Total comprehensive (loss) income attributable to:
Owners of the parent
(1,744)
38
14,131
(3,664)
(2,730)
16,734
13,275
8,495
6,269
Non-controlling interests
(1,742)
38
9,395
(3,666)
(1,178)
16,734
3,788
8,462
6,243
(3,486)
76
23,526
(7,330)
(3,908)
33,468
17,063
16,957
12,512
Summary Statements of Cash Flows
Cash flows from (used in) operating activities
21,286
3,626
39,729
3,295
42,062
61,097
(2,202)
850
4,326
Cash flows used in financing activities
(15,029)
(2,352)
(38,341)
(3,536)
(48,733)
(61,302)
(2,274)
(3,145)
(5,201)
Cash flows (used in) from investing activities
(4,950)
(1,651)
(534)
(53)
(1,153)
(51)
298
117
(543)
Effects on exchange rate changes on cash and
cash equivalents
(5)
(26)
42
—
1,349
167
14
44
171
Net change in cash and cash equivalents
1,302
(403)
896
(294)
(6,475)
(89)
(4,164)
(2,134)
(1,247)
Distributions paid to non-controlling interests
—
—
9,383
—
—
30,651
274
1,432
358
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p140
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Year ended December 31, 2023
Harrison
Kwoiek
Mesgi'g Ugju's'n
Sainte-Marguerite
Innergex France
(67-day period)
Innergex HQI USA
Summary Statements of Earnings (Loss)
and Comprehensive Income (Loss)
Revenues
40,808
15,755
51,980
9,143
34,259
77,324
Expenses
58,734
21,695
28,281
15,623
28,253
82,384
Net (loss) earnings
(17,926)
(5,940)
23,699
(6,480)
6,006
(5,060)
Other comprehensive income
—
—
(989)
—
(4,583)
(6,909)
Total comprehensive (loss) income
(17,926)
(5,940)
22,710
(6,480)
1,423
(11,969)
Net (loss) earnings attributable to:
Owners of the parent
(8,965)
(2,970)
14,521
(3,239)
4,211
(2,530)
Non-controlling interests
(8,961)
(2,970)
9,178
(3,241)
1,795
(2,530)
(17,926)
(5,940)
23,699
(6,480)
6,006
(5,060)
Total comprehensive (loss) income attributable to:
Owners of the parent
(8,965)
(2,970)
13,915
(3,239)
1,003
(5,985)
Non-controlling interests
(8,961)
(2,970)
8,795
(3,241)
420
(5,984)
(17,926)
(5,940)
22,710
(6,480)
1,423
(11,969)
Summary Statements of Cash Flows
Cash flows from operating activities
(210)
3,953
34,348
3,862
6,972
65,885
Cash flows used in financing activities
(14,237)
(2,087)
(36,293)
(3,213)
(16,101)
(65,944)
Cash flows (used in) from investing activities
20,562
(850)
(3,830)
(1,432)
(1,173)
(175)
Effects on exchange rate changes on cash
and cash equivalents
—
—
—
—
888
(71)
Net change in cash and cash equivalents
6,115
1,016
(5,775)
(783)
(9,414)
(305)
Distributions paid to non-controlling interests
—
—
8,597
—
—
32,972
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p141
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Summary Statements of Financial Position
As at December 31, 2024
Harrison
Kwoiek
Mesgi'g
Ugju's'n
Sainte-
Marguerite
Innergex
France
Innergex
HQI USA
Foard City
Griffin Trail
Phoebe
Current assets
19,749
7,332
15,362
2,352
53,385
12,150
65,574
8,505
7,161
Non-current assets
500,707
160,384
247,771
110,116
706,989
290,001
500,465
370,496
291,928
520,456
167,716
263,133
112,468
760,374
302,151
566,039
379,001
299,089
Current liabilities
31,393
25,662
21,188
13,580
75,630
34,699
95,434
17,320
7,697
Non-current liabilities
435,147
191,798
209,365
133,524
668,146
—
184,085
143,070
51,121
Equity (deficit) attributable to owners
45,467
(28,985)
37,764
(9,036)
11,644
133,731
222,913
109,503
120,547
Non-controlling interests (deficit)
8,448
(20,758)
(5,181)
(25,601)
4,982
133,722
63,607
109,107
119,724
520,455
167,717
263,136
112,467
760,402
302,152
566,039
379,000
299,089
As at December 31, 2023
Harrison
Kwoiek
Mesgi'g Ugju's'n
Sainte-Marguerite
Innergex France
Innergex HQI USA
Current assets
14,509
8,450
16,839
2,408
80,753
12,727
Non-current assets
512,090
161,276
254,882
113,011
734,955
313,711
526,599
169,726
271,721
115,419
815,708
326,438
Current liabilities
25,973
25,347
17,846
12,818
86,026
2,297
Non-current liabilities
443,225
194,198
221,311
129,908
709,148
28,854
Equity (deficit) attributable to owners
47,211
(29,023)
37,757
(5,372)
14,374
147,648
Non-controlling interests (deficit)
10,190
(20,796)
(5,193)
(21,935)
6,160
147,639
526,599
169,726
271,721
115,419
815,708
326,438
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p142
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
25. RELATED PARTY TRANSACTIONS
a) Key management personnel compensation
The following are transactions that the Corporation engaged with its key management personnel. The members of the
Board of Directors as well as the President and CEO, CFO, CAO, Chief Legal Officer and Secretary, former Chief
Human Resources Officer and all the Senior Vice Presidents and Vice Presidents are key management personnel of the
Corporation.
Year ended December 31
2024
2023
Salaries and short-term benefits
8,436
8,790
Board of Directors' fees
1,381
989
Performance share plan
—
1,283
Share-based payments
22
59
9,839
11,121
b) Transactions with partners
Related party transactions conducted in the normal course of operations are measured at an exchange amount, which
is the amount established and agreed to by the related parties, unless specific requirements within IFRS require
different treatment.
The Corporation's subsidiaries have entered into the following transactions with partners:
•
Sales made under PPAs with Hydro-Québec (Refer to Note 30 – Segment Information - Major Customers).
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p143
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
26. FINANCIAL RISK MANAGEMENT AND FAIR VALUE DISCLOSURES
Fair value disclosures
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their
levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not
measured at fair value if the carrying amount is a reasonable approximation of fair value. The Corporation determined
that the carrying values of its current financial assets and liabilities, as well as their government-backed securities
included in reserve accounts, was within reasonable proximity of their respective fair values due to their shorter-term
maturities and high liquidity.
As at December 31, 2024
As at December 31, 2023
Fair value
level
Carrying
amount
Fair value
Carrying
amount
Fair value
Non-current financial assets measured
at amortized cost
Other investments included in other long-
term assets
Level 2
24,444
24,444
23,803
23,803
Non-current financial liabilities
measured at amortized cost
Long-term loans and borrowings
Level 2
6,562,368
6,652,801
6,281,147
6,347,187
Contingent considerations included in
other long-term liabilities
Level 3
36,630
36,630
34,077
34,077
Derivative financial instruments
measured at fair value
Interest rate swaps
Level 2
56,633
56,633
79,102
79,102
Foreign exchange forwards
Level 2
(8,806)
(8,806)
(8,616)
(8,616)
Power and basis hedges
Level 3
19,608
19,608
(66,170)
(66,170)
Other investments
The valuation model considers the present value of expected payments, discounted using a risk-adjusted discount rate.
Long-term loans and borrowings
The fair value of each debt instrument is estimated utilizing standard financial industry practices where future expected
cash flows are discounted at discount rates based on the interest rate and credit conditions prevailing in the financial
markets as of the valuation date. Notably, for fixed rate instruments, contractual cash flows are discounted at an
appropriate yield to maturity. For floating rate instruments, future expected contractual interest payments represent the
sum of future expected levels of the reference interest rate index and the instrument’s quoted margin, whereas discount
rates represent the sum of future expected levels of the reference index and an appropriate discount margin.
Appropriate yields to maturity and discount margins are estimated utilizing the available quoted or indicative pricing of
individual debt instruments or indices whose credit is deemed comparable to the debt instruments being evaluated.
Contingent considerations
The purchase price of certain facilities acquired include, from time to time, contingent considerations that are based on
future market conditions. The fair value calculation of contingent considerations gives rise to measurement uncertainty
as they rely on variables that are constructed using certain unobservable inputs.
Interest rate swaps
The fair value is calculated as the present value of the estimated future cash flows. Estimated cash flows are
discounted using a yield curve constructed from similar sources and which reflects the relevant benchmark interbank
rate used by market participants for this purpose when pricing interest rate swaps. The fair value estimate is subject to a
credit risk adjustment that reflects the credit risk of the Corporation and of the counterparty.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p144
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Foreign exchange forwards
The fair value is calculated as the present value of the estimated future cash flows, representing the differential between
the value of the contract at maturity and the value determined using the exchange rate the financial institution would use
if the same contract was renegotiated at the statement of financial position date. The fair value estimate is subject to a
credit risk adjustment that reflects the credit risk of the Corporation and of the counterparty, considering the offsetting
agreements, as applicable.
Power hedges
The fair values of the power hedges are calculated using a discounted cash flow model. The fair value calculation of
power hedges gives rise to measurement uncertainty as the power price curves are constructed using various
methodologies and assumptions, which consider certain unobservable inputs. As at December 31, 2024, with respect to
the PV Salvador power hedges, the withdrawal node future power prices are expected to be in a range of US $0.00 to
US$188.15 per MWh between January 1, 2025 and December 31, 2030.
The fair value estimates are subject to a credit risk adjustment that reflects the credit risk of the Corporation or of the
counterparty.
Further information is provided below with regard to the methodology for constructing the forward power price curves.
PV Salvador power hedges: The fair value of the power hedges is derived from future power price forecasts that are not
based on observable market data. Such forecasts are constructed using various assumptions depending on historical
market prices, supply, demand and congestion volumes observed on the Chilean grid, as well as econometric models.
In addition, as the notional volume of the power hedges is not contractually fixed, the estimated volume is determined
using various assumptions such as the expected demand and volume of power to be successfully settled through the
market bidding process.
Interest rate benchmark reform
The Corporation holds interest rate swaps for risk management purposes that are designated in cash flow hedging
relationships.
Canadian Dollar Offered Rate ("CDOR")
On June 28, 2024, the remaining CDOR 1-month, 2-month and 3-month tenors have either ceased, or ceased being
representative.
All of the CDOR financial instruments were transitioned to Canadian Overnight Repo Rate Average ("CORRA").
Financial risk management
The Corporation is exposed to a variety of financial risks: market risk (e.g. interest rate, foreign exchange, and power
price), credit risk and liquidity risk. The Corporation’s objective with respect to financial risk management is to secure
the long-term internal rate of return of its energy projects by mitigating uncertainty related to the fluctuation of certain
key variables.
Management is responsible for establishing controls and procedures to ensure that financial risks are managed within
acceptable levels. The Corporation does not use derivative financial instruments for speculative purposes.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p145
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
a)
Market risk
Market risk is related to fluctuations in the fair value or future cash flows of a financial instrument because of market
price variations. Market risk includes interest rate, foreign exchange, and power price risks.
(i)
Interest rate risk
Interest rate risk is the risk that the future cash flows or fair value of a financial instrument will fluctuate due to
changes in market interest rates. Financial assets and liabilities with variable interest rates expose the Corporation to
interest rate risk with respect to its cash flows. The risk that the Corporation will realize a loss as a result of a decline
in the fair value of any short-term securities included in cash and cash equivalents and short-term investments is
limited because these investments, although readily convertible into cash, are generally held-to-maturity.
The Corporation’s cash flow exposure to interest rate risk relates principally to floating rate long-term loans and
borrowings. Management mitigates this risk by entering into fixed rate financing agreements or interest rate swap
agreements related to its floating rate financing agreements. From time to time, the Corporation may enter into bond
forward contracts to pre-hedge the interest rate risk related to future debt issuances by locking-in an interest rate
during the period leading to the execution of the financing agreement.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p146
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Except when indicated otherwise, the Corporation has designated the following derivative financial instruments as
cash flow hedges1:
Early
termination
option
Notional Amounts
Project
Notional
Currency 2
Variable
rate
Swap
Rate
Maturity
December 31,
2024
December 31,
2023
Corporate
Innergex2
CAD
CORRA
3.00%
2054
2025
54,492
—
Innergex
CAD
CORRA
2.90%
2030
2029
50,000
50,000
Innergex
CAD
CORRA
2.95%
2028
2028
50,000
50,000
Innergex
CAD
CORRA
2.04%
2028
2028
30,000
30,000
Innergex
CAD
CORRA
3.68%
2025
None
25,000
25,000
Innergex
CAD
CORRA
3.69%
2025
None
25,000
25,000
Innergex
CAD
CORRA
3.97%
2031
2025
21,574
24,161
Innergex
CAD
CORRA
1.60%
2029
2029
20,000
20,000
Innergex
CAD
CORRA
1.64%
2029
2029
20,000
20,000
Innergex
CAD
CORRA
1.90%
2027
2027
20,000
20,000
Innergex
CAD
CORRA
2.04%
2028
2027
—
52,600
Innergex
CAD
CORRA
1.89%
2049
2029
—
25,000
Innergex
CAD
CORRA
1.79%
2034
2029
—
20,000
Innergex
CAD
CORRA
1.83%
2034
2027
—
20,000
Innergex
CAD
CORRA
1.95%
2049
2029
—
20,000
Innergex
CAD
CORRA
2.03%
2024
None
—
20,000
Innergex
CAD
CORRA
2.07%
2024
None
—
20,000
Alterra
CAD
CORRA
2.25%
2031
None
100,000
100,000
Alterra
CAD
CORRA
2.19%
2028
None
62,500
62,500
Alterra
CAD
CORRA
2.28%
2031
None
12,500
12,500
Hydroelectric segment
Fitzsimmons Creek
CAD
CORRA
2.55%
2041
2026
15,389
15,895
Ashlu Creek
CAD
CORRA
4.38%
2035
2025
—
71,194
Coyanco
USD
SOFR
1.01%
2031
None
6,562
6,700
Wind segment
Cartier
CAD
CORRA
2.51%
2032
None
308,897
356,388
Wind Finance
CAD
CORRA
2.94%
2029
None
22,974
—
Mesgi'g Ugju's'n
CAD
CORRA
1.59%
2026
None
22,557
36,874
Boswell
USD
SOFR
3.27%
2052
2034
219,341
201,683
Mountain Air
USD
SOFR
1.77%
2029
None
15,838
16,695
Foard City
USD
SOFR
2.01%
2029
2026
—
14,323
Rougemont
EUR
EURIBOR
1.35%
2032
None
90,933
99,408
Vaites
EUR
EURIBOR
1.28%
2032
None
43,956
48,371
Cholletz
EUR
EURIBOR
2.64%
2030
None
7,043
8,193
Solar Segment
Sault Ste. Marie
CAD
CORRA
1.50%
2030
2026
107,057
124,028
Stardale
CAD
CORRA
3.28%
2032
None
58,749
61,425
Hillcrest
USD
SOFR
0.69%
2041
2028
84,353
81,827
Phoebe
USD
SOFR
2.82%
2037
2026
—
123,901
1,494,715
1,883,666
1.
The Corporation applies a hedge ratio of 1:1 and determines the existence of an economic relationship between the hedging
instrument and hedged item based on the reference interest rates, maturities and the notional amounts. The Corporation
assesses whether the derivative designated in each hedging relationship is expected to be effective in offsetting changes in
cash flows of the hedged item using the hypothetical derivative method.
2.
This derivative financial instrument has not been designated by the Corporation as cash flow hedge.
3.
USD swaps are converted at a fixed rate of CAD 1.4384 and EURO swaps are converted at a fixed rate of CAD 1.4890.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p147
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Sensitivities
A reasonably possible change of 10 basis points in interest rates at the reporting date would have increased
(decreased) earnings (loss) and other comprehensive income (loss) by the amounts shown below. This analysis
assumes that all other variables remain constant.
Interest rate swaps
Earnings (loss)
Other comprehensive income
(loss)
10 bps
increase
10 bps
decrease
10 bps
increase
10 bps
decrease
December 31, 2024
563
(573)
6,181
(6,236)
December 31, 2023
10
(13)
9,309
(9,401)
(ii) Foreign exchange risk
Foreign exchange risk is the risk that future cash flows or fair value of a financial instrument will fluctuate because of
changes in foreign exchange rates, namely the U.S. dollar and Euro against the Canadian dollar.
The Corporation is exposed to transactional foreign currency risk to the extent that there is a mismatch between the
currencies in which sales, purchases, receivables and borrowings are denominated and the respective functional
currencies of the Corporation and its subsidiaries. Other than during the construction of renewable energy projects,
such transactional risks are limited, given the majority of transactions are made in the respective functional currencies
of the Corporation or its subsidiaries.
The Corporation has subsidiaries in Europe for which the revenues, net of the expenses incurred, are repatriated to
Canada. The Corporation's foreign exchange forwards are denominated in Euros. Repatriated funds that are not used
to service the Euro denominated foreign exchange forwards are converted into Canadian dollars at the exchange rate
in effect on the conversion date.
The Corporation has designated the following derivative financial instruments as net investment hedges1:
Notional Amounts
Contracts
Maturity
December 31, 2024
December 31, 2023
Contracts for which hedge accounting is used
Foreign exchange forwards amortizing until 2043,
allowing conversion at a fixed rate of
CAD 1.4694/Euro
2026
104,449
109,345
Foreign exchange forwards amortizing until 2043,
allowing conversion at a fixed rate of
CAD 1.5244/Euro
2026
108,359
112,905
212,808
222,250
1.
The Corporation applies a hedge ratio of 1:1. The Corporation determines the existence of an economic relationship between
the hedging instrument and hedged item based on the currency and notional amounts. The Corporation assesses whether the
derivative designated in each hedging relationship is expected to be effective in offsetting changes in value of the hedged item
using the hypothetical derivative method.
The Corporation also has construction projects in Canada for which some expenses are paid in U.S. dollar. To
mitigate the transactional foreign exchange risk associated with those projects, the Corporation has entered into
foreign exchange forwards denominated in U.S. dollar.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p148
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
The Corporation has entered into the following derivative financial instruments which were not designated as hedging
instruments:
Notional Amounts
Contracts
Maturity
December 31, 2024
December 31, 2023
Contracts used to hedge the foreign exchange risk
Foreign exchange forwards amortizing until 2025,
allowing conversion at a rate of CAD between
1.35697-1.36465 / USD
2025
39,364
—
Foreign exchange forwards amortizing until 2026,
allowing conversion at a rate of CAD between
1.34847-1.35645 / USD
2026
19,846
—
59,210
—
Sensitivities
A reasonably possible 1% strengthening (weakening) of the Euro against the Canadian Dollar at the reporting date
would have increased (decreased) earnings (loss) and other comprehensive income (loss) by the amounts shown
below. This analysis assumes that all other variables remain constant.
Foreign exchange forwards
Earnings (loss)
Other comprehensive income
(loss)
1% increase
1% decrease
1% increase
1% decrease
December 31, 2024
(135)
136
(1,508)
1,479
December 31, 2023
(158)
161
(1,459)
1,456
(iii) Power price risk
Power price risk is the risk that future cash flows or fair value of a financial instrument will fluctuate because of
changes in market prices of electricity.
Most sales of electricity are made pursuant to long-term agreements where the offtakers are committed to take and
pay for the total production at pre-determined prices, up to certain annual limits and generally subject to annual
inflation. For some of the Corporation’s facilities, power generated is sold on the open market and supported by
power hedges to address market price risk exposure.
PV Salvador power hedges
The Corporation is subject, under the PV Salvador solar project, to a portfolio of power hedges maturing on
December 31, 2030. The PV Salvador power hedges are accounted for at fair value, with subsequent changes being
recognized as change in fair value of derivative financial instruments. The unrealized net gain recognized as change
in fair value of financial instruments amounts to $1,757 for the year ended December 31, 2024.
Sensitivities
A reasonably possible change of 10% in the withdrawal nodes projected prices at the reporting date would have
increased (decreased) earnings (loss) by the amounts shown below. This analysis assumes that all other variables
remain constant.
Power hedge
Earnings (loss)
10 % increase
10% decrease
December 31, 2024
(2,479)
2,479
December 31, 2023
(2,284)
2,284
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p149
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
(iv) Hedge accounting
All the hedging instruments are accounted for in the current or non-current portion of derivative financial instruments
in the consolidated statements of financial position. As at December 31, 2024 the following items were designated as
hedging instruments to mitigate the interest rate risk and the foreign exchange risk:
Carrying amount of the hedging
instruments
Notional amount
of the hedging
instruments
Assets
Liabilities
Cash-flow hedges:
Interest rate risk
Interest rate swaps
1,440,223
58,984
(3,019)
Net investment hedges:
Foreign exchange risk
Foreign exchange forwards
194,800
79
(10,779)
The following table summarizes the impact of hedge ineffectiveness and hedging gains (losses) as at
December 31, 2024:
Changes in fair
value of the
hedging
instrument
recognized in
other
comprehensive
income
Hedge
ineffectiveness
recognized in
profit or loss
Amount
reclassified from
the cash flow
hedge reserve to
profit or loss
Cash-flow hedge:
Interest rate risk
Interest rate swaps
(21,666)
(581)
5,867
Power price risk
Power hedge 1
—
—
3,429
Hedge of net investment in a foreign operation:
Foreign exchange risk
Foreign exchange forwards
(3,624)
(109)
1,181
1.
The balance of cash flow hedge reserve relating to power price risk for which hedge accounting is no longer applied is $19,209.
Ineffectiveness is accounted for in the change in fair value of financial instruments in the consolidated statements of
earnings.
For the hedge relationships covering the interest rate risk and the foreign exchange risk, ineffectiveness can result
from the credit valuation adjustment applied to the fair value of hedging derivatives as well as the designation of
hedging derivatives with a non-zero fair value at the inception of a hedging relationship.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p150
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
b)
Credit risk
Credit risk is the risk of financial loss to the Corporation that may arise from a party’s failure to meet its contractual
obligations. The maximum exposure to credit risk at the reporting date is the carrying value of the Corporation’s financial
assets.
(i)
Cash and cash equivalents, restricted cash and reserves
As at December 31, 2024, the Corporation was holding cash and cash equivalents, restricted cash (Note 11) and
reserves included in other long-term assets (Note 17). The Corporation limits its counterparty credit risk on these
assets by dealing with highly rated, large Canadian financial institutions and, to a lesser degree, at major U.S.,
European and Chilean financial institutions. The Corporation recorded no impairment on these financial assets.
(ii) Accounts receivable
Most of the Corporation's trade receivables relate to electricity sold to public utilities, including Hydro-Québec, British
Columbia Hydro and Power Authority, Hydro One Inc. and its affiliates, Idaho Power Company and Électricité de
France. These utility companies are highly rated by the various rating agencies.
Most of the Corporation's trade receivables in Chile relate to electricity sold to distribution companies, with the
majority being sold to large distribution companies highly rated by the various rating agencies.
Accounts receivable also include commodity taxes and investment tax credits which are receivable from
governments, mainly in relation with the development and construction of projects.
As at December 31, 2024, $987 ($2,948 in 2023) of trade and other receivables were more than 90 days overdue and
a total write-off of impaired receivables of $1,579 ($3,450 in 2023) was recorded during the year. Given that expected
credit losses are minimal, the expected credit losses by trade accounts receivable aging have not been presented.
(iii) Derivatives
A counterparty is deemed qualified to transact with the Corporation in interest rate or currency hedging transactions if
and so long as the counterparty is a bank, insurance company, investment dealer, investment bank or other financial
institution, or any affiliate of any of them whose long-term debt is rated ‘A-‘(stable) (or its equivalent) or better from
any of (i) Standard & Poor’s Corporation (ii) Moody’s Investor Services Inc. (iii) DBRS Limited or (iv) Fitch Ratings.
c)
Liquidity risk
Liquidity risk relates to the capacity of the Corporation to meet liabilities as they become due. Certain covenants of long-
term borrowing contracts could prevent the Corporation from repatriating funds from certain subsidiaries.
Some hedging instruments have embedded early termination options. The triggering of these options could pose a
liquidity risk. Should the early termination option be triggered, a presumed realized loss would be offset by the savings
realized on future expenses, as a negative value would be the result of an environment in which actual rates are more
beneficial than the rates embedded in the swap.
The Corporation has a negative working capital of $336,669 as at December 31, 2024, (negative working capital of
$48,341 in 2023). The Corporation limits its excess cash position through repayments of its revolving term credit facility.
When required, the Corporation can use its revolving term credit facility of which $705,634 was available as at
December 31, 2024 ($470,216 in 2023). The Corporation considers its current level of working capital and revolving
term credit facility availability to be sufficient to meet its needs. In addition, in the event of lower revenue due to a
decline in production or to a major equipment breakdown, the Corporation has available reserve accounts (as described
in (Note 17) and is covered by insurance plans.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p151
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
The following table presents the contractual cash flows of non-derivative financial liabilities and derivative financial
instruments:
Less than 1 year
Between 1 year
and 5 years
Over 5 years
Total
Non-derivative financial liabilities
Accounts payable and other payables
274,709
—
—
274,709
Long-term loans and borrowings1
934,800
2,449,805
5,249,093
8,633,698
Other liabilities
31,380
5,250
47,403
84,033
Lease liabilities
18,717
72,443
432,510
523,670
Derivative financial instruments2
Interests rate swaps
(11,360)
(25,562)
(35,454)
(72,376)
Foreign exchange forwards
(8)
557
16,990
17,539
Power Hedge
(4,840)
(23,791)
(5,195)
(33,826)
Total
1,243,398
2,478,702
5,705,347
9,427,447
1.
The contractual cash flows include debt principal and interest payments.
2.
The contractual cash flows are presented at the net of cash receipts and disbursements for each derivative financial instrument.
The amounts may fluctuate from the actual cash flows at settlement due to the volatility of these instruments.
27. COMMITMENTS
a) Power Purchase Agreements
Quebec facilities
Under PPAs with terms varying from 20 to 25 years and maturing between 2026 and 2046, Hydro-Québec agreed to
purchase all of the electrical energy produced by the facilities and wind farms located in the Province of Quebec.
Certain facilities have an agreed maximum quantity of electricity and a minimum quantity of electricity to deliver during
each of the consecutive 12-month periods. Expiring PPA's are being renegotiated under the renewal rights of the
Corporation.
On August 5, 2024, the Corporation and Hydro-Québec have renewed the Portneuf PPA for an additional 25-year term
applying retrospectively from May 3, 2021.
British Columbia facilities
Under PPAs with terms varying from 20 to 40 years and maturing between 2026 and 2057, British Columbia Hydro and
Power Authority agreed to purchase all of the electrical energy produced by the facilities located in the Province of
British Columbia.
Ontario facilities
Under PPAs with terms varying from 20 to 30 years and maturing between 2025 and 2032, Hydro One inc. and its
affiliates agreed to purchase all of the electrical energy produced by the facilities located in Ontario.
Europe facilities
Under PPAs maturing between 2025 and 2032, offtakers, including among others Électricité de France, agreed to
purchase all of the electrical energy produced by the 16 wind facilities located in France.
The Tonnerre energy storage project has been awarded a contract for differences maturing in 2028, offering a fixed-
price contract for capacity certificates.
USA facilities
Under PPAs maturing between 2027 and 2054, offtakers agreed to purchase all of the electrical energy produced by the
Corporation's USA facilities, with the exception of the Phoebe solar and Griffin Trail wind facilities, which sell their
energy directly on the merchant power market.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p152
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Chile facilities
Under a PPA maturing in 2033, a client agreed to purchase all of the energy produced by the Pampa Elvira solar facility
located in Chile.
Under PPAs maturing between 2025 and 2030, clients agreed to purchase all of the electricity produced by the
Peuchen, Mampil and Guayacan hydro facilities.
Under PPAs maturing between 2030 and 2041, Chilean energy distributors agreed to purchase a portion of the
electricity produced by the PV Salvador solar facility and the Sarco, Cuel and Aurora wind facilities.
b) Other Commitments
(i) Hydroelectric facilities
The Corporation and its subsidiaries entered into royalties and other commitments related to surrounding municipalities,
land owners and the operation of the hydroelectric facilities.
Ashlu Creek facility
The ownership of the assets of the project will be transferred to a First Nation in 2049 for a nominal financial
consideration.
Boulder Creek facility
40% of the Corporation's ownership of the project will be transferred to the First Nation partner in 2057 for no financial
consideration.
Big Silver facility
A 50% ownership of the assets of the project will be transferred to one of the First Nations partners in 2056 for no
financial consideration.
Glen Miller facility
Glen Miller Power, Limited Partnership entered into a 30-year lease agreement, ending in December 2035, for the site
that is in commercial operation. The lease has a 15-year extension option upon terms and conditions to be negotiated.
Glen Miller Power, Limited Partnership is committed to remit the facility to the lessor of the site at the end of the lease
agreement for no financial consideration.
Harrison Hydro L.P.
The ownership of Douglas Creek Project L.P. and Tipella Creek Project L.P. will be transferred to a First Nation in 2069
for no financial consideration.
Kwoiek Creek facility
The Corporation's ownership of the project will be transferred to the First Nation partner in 2054 for no financial
consideration.
Rutherford Creek facility
Rutherford L.P. agreed to make payments to the former owners, following the expiry of the Rutherford Creek PPA in
2024. This payment is based on the difference between the then selling price of electricity and the last selling price of
electricity under the agreement, adjusted annually following the expiry of the agreement by 50% of the increase or
decrease in the CPI over the previous 12 months. This amount will correspond to 35% of the gross revenues
attributable to the difference for the 20-year period following the expiry of the power purchase agreement. After the 20-
year period, that portion of the payment will correspond to 30% of the gross revenues attributable to the difference. This
commitment is secured by the Rutherford L.P. facility but is subordinated to the term loan.
Tretheway facility
50% of the Corporation's ownership will be transferred to a First Nation in 2055 for no financial consideration.
Upper Lillooet facility
40% of the Corporation's ownership of the project will be transferred to the First Nation partner in 2057 for no financial
consideration.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p153
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
(ii) Wind farm facilities
The Corporation and its subsidiaries entered into royalties and other commitments related to amounts to set aside for
the dismantling of wind farm components, commitments to surrounding municipalities and land owners and the
operation of the wind farms.
Europe
The French subsidiaries entered into commitments related to land leases, maintenance and management contracts for
the operations of the wind farms.
c) Summary of commitments
As at December 31, 2024, the expected schedule of commitment payments is as follows:
Year of expected payment
Under 1 year
1 to 5 years
Thereafter
Total
Purchase obligations
38,688
155,779
368,342
562,809
Variable payments on lease contracts
2,105
4,446
1,923
8,474
Total
40,793
160,225
370,265
571,283
28.
CONTINGENCIES
The Corporation is subject to various claims that arise in the normal course of business. Management believes that
adequate provisions have been made in the accounts where required. Although it is not possible to estimate the extent
of potential costs and losses, if any, management believes that the ultimate resolution of such contingencies will not
have an adverse effect on the financial position of the Corporation.
Innavik EPC Agreement
During 2023, legal hypothecs were registered by the contractor against the Innavik hydroelectric project ("Innavik" or
"the project"), a joint venture company, in the amount of $61,251, representing the contractor’s claim for payment of
additional costs under the engineering, procurement and construction ("EPC") agreement with Innavik, and interests
thereon. The Corporation disputes that claim in good faith and has taken legal action to cause the legal hypothecs to be
removed from title. No provision in respect of this litigation has been recorded as at December 31, 2024.
Senvion GmbH claims under insolvency proceedings
During 2019, Senvion GmbH ("Senvion"), an insolvent German company and service provider under the turbine supply
agreement at Innergex's Mesgi'g' Ugju's'n wind facility, filed for bankruptcy. Certain of the performance obligations under
the turbine supply agreement were covered, subject to terms and conditions precedent, by a $19,642 letter of credit.
The Corporation availed itself of the full amount on April 27, 2021. Such proceeds are to be used to remediate
Senvion's unfulfilled performance obligations under the turbine supply agreement.
On May 17, 2023, Senvion issued a claim through the Ontario Superior Court of Justice (the "Court") against Mesgi'g
Ugju's'n (MU) Wind Farm L.P. and Mesgi'g Ugju's'n (MU) Wind Farm Inc. (together, "MU"), alleging that MU drew down
on a $19,642 letter of credit held in its favour in violation of a stay of proceedings imposed by the Court under the
Companies Creditors’ Arrangement Act. The Corporation considers that this procedure has no basis and is disputing the
claim. No provision in respect of this litigation has been recorded as at December 31, 2024.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p154
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
29. CAPITAL MANAGEMENT
The Corporation's strategy in managing its capital is: (i) to develop or acquire high-quality renewable power production
and storage facilities that generate sustainable and stable cash flows, with the objective of achieving a high return on
invested capital, and (ii) to pay a dividend.
The Corporation seeks to achieve its objectives by:
•
Maintaining the generating capacity and enhancing the operation of its hydroelectric facilities, wind farms and solar
farms; and
•
Acquiring and developing new renewable electricity generating facilities.
The Corporation maintains its generating capacity by investing the necessary funds to maintain and continually upgrade
its equipment. The Corporation also invests amounts on an annual basis in major maintenance reserve in order to fund
any major maintenance of hydroelectric facilities, wind farms or solar farms which may be required to preserve the
Corporation's generating capacity.
The Corporation determines the amount of capital required, and its allocation between debt and equity, for the
acquisition and development of new electricity-generating facilities by considering the specific characteristics of stability
and growth of each facility. This determination is made in order to pay a dividend while maintaining an acceptable level
of indebtedness.
The Corporation has a hydrology/wind power reserve. This reserve could be used in the event that the net available
cash for any given year is less than expected, due to normal changes in hydrology or wind conditions or other
unpredictable factors.
The Corporation's capital is composed of long-term loans and borrowings and shareholders' equity. Total capital
amounts to $8,081,040 as at December 31, 2024.
The Corporation uses equity primarily to finance the development of projects. The Corporation uses long-term loans
and borrowings to finance the construction of its facilities. The Corporation expects to finance 70% to 85% of its
construction costs mostly through non-recourse long-term debt financing or, for qualifying projects in the United States,
through tax equity financing.
Future development and construction of new facilities, development of projects, expenses on prospective projects and
other capital expenditures will be financed out of cash generated from the Corporation's operating facilities, borrowings
and/or issuance of additional equity. To the extent that external sources of capital, including issuance of additional
securities of the Corporation, become limited or unavailable, the Corporation's ability to make necessary capital
investment to construct new or maintain existing project facilities will be impaired. There is no certainty that sufficient
capital will be available on acceptable terms to fund further development or expansion.
Under the terms of the Revolving credit facilities, the Corporation needs to maintain a leverage ratio and an interest
coverage ratio. If the ratios are not met, the lender has the ability to recall the facility.
Regarding the respective non-recourse projects financing, some subsidiaries and joint ventures of the Corporation need
to maintain minimum debt coverage ratios. If the ratios of a particular project financing are not met, the lenders could
have the ability to recall the particular debt. Certain financial restrictive clauses could prevent the subsidiaries and joint
ventures from making distributions to the Corporation.
All debt covenants are monitored on a regular basis by the Corporation. As at December 31, 2024, the Corporation and
its subsidiaries and joint ventures have met all material financial and non-financial conditions, related to their credit
agreements, trust indentures and PPAs. Were they are not met, certain financial and non-financial covenants included
in the credit agreements, trust indentures, PPAs entered into by various subsidiaries and joint ventures of the
Corporation could limit the capacity of these subsidiaries and joint ventures to transfer funds to the Corporation. These
restrictions could have a negative impact on the Corporation's ability to meet its obligations.
The Corporation's capital management objectives, policies and procedures are to ensure the sustainability of the
dividend payable to its shareholders and the development or acquisition of power production facilities.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p155
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
30. SEGMENT INFORMATION
Operating segments
The Corporation produces and sells electricity generated by its hydroelectric, wind and solar facilities to publicly-owned utilities or other creditworthy counterparties.
The Corporation’s Management analyzes the results and manages operations based on the type of technology, resulting in different cost structures and skill set
requirements for the operating teams. The Corporation consequently has three operating segments: (a) hydroelectric power generation (b) wind power generation
and (c) solar power generation.
"Revenues and Production Tax Credits Proportionate" are Revenues and Production Tax Credits plus Innergex's share of Revenues and Production Tax Credits of
the operating joint ventures and associates. “Adjusted EBITDA” represents operating income, to which are added (deducted) depreciation and amortization, ERP
implementation, impairment charges and the realized portion of the change in fair value of power hedges. "Adjusted EBITDA Proportionate" represents Adjusted
EBITDA plus Innergex’s share of Adjusted EBITDA of the operating joint ventures and associates. Revenues and Production Tax Credits Proportionate, Adjusted
EBITDA and Adjusted EBITDA Proportionate are not recognized measures under IFRS and have no standardized meaning prescribed by IFRS. They may therefore
not be comparable to similar measures presented by other issuers. Readers are cautioned that these measures should not be construed as an alternative to net
earnings (loss), as determined in accordance with IFRS.
Except for Revenues and Production Tax Credits Proportionate, Adjusted EBITDA and Adjusted EBITDA Proportionate described above, the accounting policies for
these segments are the same as those described in the material accounting policies. The Corporation accounts for inter-segment and management sales at the
carrying amount.
Year ended December 31, 2024
Operating segments
Hydroelectric
Wind
Solar
Segment results
Segment Revenues and Production Tax Credits
367,708
551,179
128,290
1,047,177
Segment Revenues and Production Tax Credits Proportionate
418,711
566,611
128,290
1,113,612
Segment Adjusted EBITDA
278,649
427,692
102,033
808,374
Segment Adjusted EBITDA Proportionate
318,191
439,042
102,033
859,266
Year ended December 31, 2024
Hydroelectric
Wind
Solar
Segment totals1
Investments in joint ventures and associates
102,959
24,324
—
127,283
Transfer of assets upon commissioning
—
818,550
74,998
893,548
Acquisition of property, plant and equipment
9,997
7,389
3,210
20,596
1.
Segment totals include only operating facilities.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p156
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Year ended December 31, 2023
Operating segments
Hydroelectric
Wind
Solar
Segment results
Segment Revenues and Production Tax Credits
358,210
536,238
147,126
1,041,574
Segment Revenues and Production Tax Credits Proportionate
403,517
552,012
147,126
1,102,655
Segment Adjusted EBITDA
276,113
404,718
94,998
775,829
Segment Adjusted EBITDA Proportionate
311,715
416,634
94,998
823,347
Year ended December 31, 2023
Hydroelectric
Wind
Solar
Segment totals1
Investments in joint ventures and associates
104,361
24,868
—
129,229
Property, plant and equipment acquired through business acquisitions
—
—
28,761
28,761
Acquisition of property, plant and equipment
10,391
22,154
2,749
35,294
1.
Segment totals include only operating facilities.
The following table presents a reconciliation of the non-IFRS measures to their closest IFRS measures:
Year ended December 31, 2024
Year ended December 31, 2023
Consolidation
Share of joint
ventures
Proportionate
Consolidation
Share of joint
ventures
Proportionate
Revenues
952,453
66,435
1,018,888
969,890
61,081
1,030,971
Production tax credits
94,724
—
94,724
71,684
—
71,684
Revenues and production tax credits
1,047,177
66,435
1,113,612
1,041,574
61,081
1,102,655
Operating income
273,527
32,704
306,231
219,575
30,962
250,537
Depreciation and amortization
380,676
18,188
398,864
361,292
16,556
377,848
Impairment of long-term assets
44,567
—
44,567
118,857
—
118,857
ERP implementation
7,574
—
7,574
12,651
—
12,651
Realized gain (loss) on power hedges
1
3,357
—
3,357
(24,632)
—
(24,632)
Adjusted EBITDA
709,701
50,892
760,593
687,743
47,518
735,261
Unallocated expenses:
General and administrative
59,926
—
59,926
60,924
—
60,924
Prospective projects
38,747
—
38,747
27,162
—
27,162
Segment Adjusted EBITDA
808,374
50,892
859,266
775,829
47,518
823,347
1.
Represents the realized loss on power hedges as detailed in Note 8 b) – Derivative Financial Instruments, excluding the $74,496 realized loss on settlement of the Phoebe power
hedge contract concurrent with the Texas Portfolio Transaction, refer to (Note 24) .
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p157
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
Geographic segments
As at December 31, 2024, including its investments in joint ventures and associates which are accounted for as equity method, the Corporation had interests in the
following operating assets: 34 hydroelectric facilities, 8 wind farms and 4 solar farms in Canada, 16 wind farms and 1 storage facility in France, 3 hydroelectric
facilities, 9 wind farms and 2 solar farms in the United States, and 5 hydroelectric facilities, 3 wind farms, 3 solar farms and 2 storage facility in Chile. The Corporation
operates in four principal geographical areas, which are detailed below:
Year ended December 31
2024
2023
Revenues and production tax credits
Canada
479,315
441,631
United States
300,001
323,293
Chile
169,177
151,040
France
98,684
125,610
1,047,177
1,041,574
As at
December 31, 2024
December 31, 2023
Non-current assets, excluding derivative financial instruments and deferred tax assets 1
Canada
3,230,350
3,355,393
United States
3,062,545
2,597,848
Chile
1,637,409
1,585,033
France
704,661
731,897
8,634,965
8,270,171
1.
Includes the investments in joint ventures and associates
Major Customers
A major customer is defined as an external customer whose transactions with the Corporation amount to 10% or more of the Corporation's annual revenues. The
Corporation has identified two major customers. The sales of the Corporation to these major customers are the following:
Major customer
Segment
Year ended December 31
2024
2023
Hydro-Québec
Hydroelectric and wind
217,487
215,184
British Columbia Hydro and Power Authority
Hydroelectric generation
204,777
171,232
422,264
386,416
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p158
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
31. SUBSEQUENT EVENTS
Subordinated Unsecured Term Loan
On February 3, 2025, upon reaching maturity, Innergex repaid the $150,000 subordinated unsecured term loan with
funds from the revolving term credit facility.
Boswell Springs Term Conversion and Tax Equity Funding
On February 18, 2025, the US$237,003 ($335,738) construction loan was converted into a US$203,268 ($287,949)
backleverage term loan carrying an interest rate of 6-month SOFR +1.38% (approximately 5.00% fixed through an
interest rate swap), amortizing over 28 years, with an initial 10-year maturity. Innergex contributed an additional
US$62,809 ($88,975) in sponsor equity.
Concurrently, the US$322,660 ($457,080) tax equity bridge loan was reimbursed with the proceeds from the tax equity
investors' contribution in return for its Class A membership interest, totalling US$338,304 ($479,241).
The excess contribution of the tax and sponsor equity funding, including the backleverage term loan, will be used to
fund the remaining construction-related spending, such as the construction holdbacks, and completion reserve.
Tax equity financing details
The interest in the Class A shares is accounted for as a debt instrument by the Corporation. The Corporation anticipates
the Flip Point date of the Boswell Springs tax equity financing to occur in 2034, upon achieving after-tax returns of
8.00%.
The tax equity investors' share of taxable income (losses), PTCs and cash distributions are detailed in the table below.
After the Flip Point, the Boswell Springs tax equity investors will retain a 5.1% financial interest in the project which will
be accounted for as non-controlling interests.
Tax Equity Investor
Taxable income (losses) and PTCs
99.0 %
Cash distributions
15.0 %
Tariffs Imposed by the United States of America
On February 1, 2025, the President of the United States of America issued three executive orders directing the United
States to impose new tariffs on imports originating from Canada, Mexico and China. These orders call for additional
25% duty on imports into the United States of Canadian-origin and Mexican-origin products and 10% duty on Chinese
origin products, except for Canadian energy resources that are subject to an additional 10% duty.
The Corporation is assessing the direct and indirect impacts to its business of such tariffs, retaliatory tariffs or other
trade protectionist measures implemented as this situation develops. However, Innergex does not import or export the
energy it produces. As such, Management anticipates that the forecasted impacts on its operating activities will be
limited.
Innergex Renewable Energy Inc.
Notes to the Consolidated Financial Statements p159
2024 Annual Report
(in thousands of Canadian dollars, except as noted and amounts per share)
SHAREHOLDER INFORMATION
Head Office
1225 St-Charles West,
10th floor
Longueuil QC J4K 0B9
Tel. 450 928.2550
Fax 450 928.2544
innergex.com
Investor Relations
Jean Trudel
Chief Financial Officer
Naji Baydoun
Director - IR
Tel. 450 928-2550 x1263
inverstorrelations@innergex.com
Transfer Agent and Registrar
For information concerning
share certificates, dividend
payments, a change of
address, or electronic
delivery of shareholder
documents, please contact:
Computershare Investor
Services Inc.
1500 Robert-Bourassa
Blvd, Suite 700
Montreal QC H3A 3S8
Tel. 1 800 564.6253
514 982.7555
service@computershare.com
Common Shares - TSX: INE
Innergex Renewable Energy Inc. had 203,125,034
common shares outstanding as at December 31, 2024,
with a closing price of $8.05 per share.
Series A Preferred Shares - TSX: INE.PR.A
Innergex Renewable Energy Inc. currently has 3,400,000
Series A preferred shares outstanding, with a nominal
value of $25 and a fixed cumulative preferential annual
cash dividend of $0.811 per share, payable quarterly on
the 15th day of January, April, July and October. Series A
preferred shares are redeemable by the Corporation
since January 15, 2021.
Series C Preferred Shares - TSX: INE.PR.C
Innergex Renewable Energy Inc. currently has 2,000,000
Series C preferred shares outstanding, with a nominal
value of $25 and a fixed-rate cumulative preferential
annual cash dividend of $1.4375 per share, payable
quarterly on the 15th day of January, April, July and
October. Series C preferred shares are redeemable by
the Corporation since January 15, 2018.
Convertible Debentures - TSX: INE.DB.B
Innergex
Renewable
Energy
Inc.
currently
has
convertible debentures outstanding for an aggregate
principal amount of $148.0 million, bearing interest at a
rate of 4.75% per annum, payable semi-annually on June
30 and December 31 of each year, commencing on
December 31, 2018. The debentures are convertible at
the holder's option into Innergex common shares at a
conversion price of $20.00 per share, representing a
conversion rate of 50 common shares per each thousand
dollars
of
principal
amount
of
debentures.
The
debentures will mature on June 30, 2025 and are
redeemable since June 30, 2021.
Convertible Debentures - TSX: INE.DB.C
Innergex
Renewable
Energy
Inc.
currently
has
convertible debentures outstanding for an aggregate
principal amount of $142.1 million, bearing interest at a
rate of 4.65% per annum, payable semi-annually on
October 31 and April 30 of each year, commencing on
April 30, 2020. The debentures are convertible at the
holder's option into Innergex common shares at a
conversion price of $22.90 per share, representing a
conversion rate of 43.6681 common shares per each
thousand dollars of principal amount of debentures. The
debentures will mature on October 31, 2026 and are
redeemable since October 31, 2022.
Dividend Reinvestment Plan (DRIP)
Innergex Renewable Energy Inc. offers a Dividend
Reinvestment Plan (DRIP) for its shareholders of
common shares. This plan enables eligible holders of
common shares to acquire additional common shares of
the Corporation by reinvesting all or part of their cash
dividends. For more information about the Corporation's
DRIP, please visit our website at innergex.com or contact
the DRIP administrator: Computershare Trust Company
of Canada. Please note that if you wish to enrol in the
DRIP but own your shares indirectly through a broker or
financial institution, you must contact this intermediary
and ask them to enrol in the DRIP on your behalf.
Credit Rating by Fitch Rating
Innergex Renewable Energy Inc.
Series A Preferred Shares
Series C Preferred Shares
BBB-
BB
BB
Independent Auditor
KPMG LLP
Ce document est disponible en français.
Pour la version numérique, visitez innergex.com
Pour la version papier, écrivez-nous à info@innergex.com
Contact
1225, Saint-Charles Street West, 10th Floor
Longueuil, Quebec, Canada J4K 0B9
info@innergex.com
T 450 928-2550 F 450 928-2544
innergex.com