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30 September 2004 - Brascan Corporation on Thursday announced the completion of the purchase of 71 operating hydroelectric power generating plants totalling 674 MW of capacity, and one 105 MW co-generation facility, from Reliant Energy, Inc., for $900m adjusted to $874m to account primarily for cash transferred to Reliant affiliates between signing and closing.
"The completion of the acquisition of this portfolio of high quality power generation assets on fourteen river systems in upstate New York builds on our growth strategy, increases our generating capacity of renewable power by almost 40 per cent and strengthens our current geographic presence in the northeast United States. In addition, this acquisition significantly enhances our operating capabilities and power marketing opportunities in the interconnected markets of New York, New England, Ontario, and Quebec," said Harry Goldgut, Co-Chairman and CEO of Brascan Power.
The New York plants generate approximately 3000 GW of energy output annually. "Our plan is to sell a significant portion of this renewable power under medium and long-term fixed price contracts with the balance sold into the wholesale power markets. The location and low cost structure of our newly acquired assets, combined with the opportunities of the New York and neighbouring power markets, ensure we remain well positioned to enhance shareholder value in our power operations," added Goldgut.
Part of the acquisition was funded through a non-recourse $500m bridge debt facility provided by a banking syndicate led by Citigroup, ABN Amro and ScotiaCapital. The balance was funded from Brascan's available financial resources.
This acquisition increases Brascan's portfolio to 120 generating stations with over 2600 MW of installed capacity on 35 river systems, predominantly in the northeast US and Canada.
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