The Caisse de dépôt et placement du Québec (CDPQ) will become the new owner of more than 3.7 gigawatts of solar, wind, hydropower, and energy storage capacity with a deal to buy independent power producer Innergex Renewable Energy Inc. for C$10 billion.
Quebec-based Innergex had assets valued at US$452 billion as of June 30 and a stake in 90 projects, with another 17 under development, Bloomberg reports. Innergex shares gained up to 55% in value when the deal was announced last Tuesday.
CDPQ already held the second-largest stake in the company before last week’s news, the news agency states. Provincial utility Hydro-Québec, which owns about 20% of Innergex, “supports the transaction, despite losing near C$80 million on its investments made since 2020, according to data compiled by Bloomberg.”
Just days before the announcement, CDPQ was dubbed an “Early Mover” among Canadian pension funds in an energy transition report card issued by Toronto-based Shift Action for Pension Wealth and Planetary Health. CDPQ earned a B+ score in Shift’s annual ranking, based on an average that included an A for climate action and an A- for aligning its targets with the 2015 Paris climate agreement.
Shift said it based the “Early Mover” moniker on CDPQ’s September, 2021 commitment to divest its $4 billion in oil holdings by the end of 2022, followed by actual moves to dump all its oil production and refining and coal mining assets by the end of 2023.
The fund also “has a history of investments in renewable energy projects around the world,” Bloomberg writes. It’s the largest shareholder in Innergex’s Quebec rival, Boralex Inc., and held a 44% share in U.S.-based Invenergy LLC at the end of 2023.
“This investment perfectly illustrates our constructive capital and dual mandate in action: while we strive for optimal returns, we are committed to supporting essential businesses headquartered in Québec, such as Innergex,” said CDPQ head of infrastructure Emmanuel Jaclot.
“The deal comes at a moment where Hydro-Québec is looking to invest close to C$200 billion to build new power generation capacity and improve transmission reliability by 2035,” Bloomberg writes. It’s also a time of peril and uncertainty for renewable energy producers as the Donald Trump administration in the United States unwinds the massive investment incentives in former president Joe Biden’s Inflation Reduction Act.
CDPQ isn’t the first major investment house looking for renewable energy acquisitions that will regain value once the Trump years have passed: late last month, formerly Toronto-, now New York-based Brookfield Asset Management announced it had bought National Grid’s onshore renewable energy business in the United States for US$1.74 billion, just a week after company president Connor Teskey said he was on the lookout for “big, listed sustainable energy producers to buy.”
At the time, Teskey’s remarks were taken as “a vote of confidence in a sector that has been hit by Trump’s sweeping cuts to green energy initiatives, as the new president moves to dismantle his predecessor Joe Biden’s climate and industrial legacy,” the Financial Times reported.
