The Canadian pension fund giant, Caisse de dépôt et placement du Québec (CDPQ), has successfully secured a deal to acquire Innergex Renewable Energy Inc., one of the country’s leading clean energy providers. In a strategic move to accelerate growth within the renewable energy sector, CDPQ has agreed to purchase the company at a price of $13.75 per common share. This represents a generous 58% premium over the closing share price on the Toronto Stock Exchange from the previous Monday, totaling a valuation of approximately $2.8 billion.
In a joint announcement released Tuesday, both organizations shared their commitment to advancing Innergex’s development under CDPQ’s ownership. Emmanuel Jaclot, CDPQ’s executive vice-president and head of infrastructure, emphasized the company’s potential. “It’s a renewable champion, and we intend to push this forward,” he remarked. With a long-term vision for growth, bolstered by greater access to capital, CDPQ believes that the shift to private ownership will unlock new opportunities for Innergex to expand and capitalize on the growing demand for renewable energy solutions.
This acquisition marks a key addition to CDPQ’s renewable energy portfolio, aligning with its dual mandate to promote Quebec’s economic development while delivering optimal returns for its stakeholders. Jaclot expressed confidence that Innergex’s true value surpasses what it is currently being priced at on public markets, reflecting the strong growth prospects in the clean energy sector.
The trend of renewable energy companies going private has gained momentum, and the deal with Innergex is part of a broader shift. In recent months, companies like Greece’s Terna Energy, France’s Neoen, and the U.K.-based Atlantica Sustainable Infrastructure plc have also been acquired by new owners aiming to delist them from the stock market. This wave of privatization highlights the growing recognition of the inherent value in long-term renewable energy assets.
The transaction’s total enterprise value, which includes Innergex’s outstanding debt, is valued at $10 billion. Innergex, headquartered in Longueuil, Quebec, is a prominent player in the renewable energy sector, owning and operating hydroelectric plants, wind farms, solar farms, and energy storage sites across Canada, the United States, France, and Chile. The company’s assets include 90 operating facilities with a combined net installed capacity of 3,707 megawatts, in addition to 17 projects currently under development.
Innergex has been actively expanding its green energy footprint, with three of its wind power projects, co-developed with Indigenous partners, recently selected by BC Hydro in its latest call for new renewable energy generation. One such project, the Stewart Creek Wind Project in British Columbia’s Peace Region, is majority-owned by the West Moberly First Nations.
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However, as Innergex’s CEO Michel Letellier pointed out, the renewable energy industry faces a significant challenge in the form of high upfront costs for projects that yield returns only several years down the line. “The public market doesn’t like that dynamic,” he explained. He believes that the shift toward privatization is driven by investors’ reluctance to appreciate the long-term value of renewable energy investments.
With CDPQ at the helm, Innergex is poised for stability and flexibility, as private ownership removes the volatility and distractions of the public markets. Letellier expressed optimism about the opportunities ahead, particularly as provinces in both Canada and the U.S. continue to issue calls for new green energy developments.
Despite political rhetoric around climate change—particularly from U.S. President Donald Trump, who has been skeptical of renewable energy—the strength of renewable energy stocks during Trump’s first term suggests a resilient market. Scotiabank analyst Robert Hope noted that CDPQ’s purchase underscores the true value of renewable energy assets, which he believes are being undervalued in the public markets.
Looking forward, CDPQ may continue its strategy of acquiring renewable energy companies, and there is speculation that other green energy firms, such as Boralex Inc., could be potential future targets. However, Jaclot remained tight-lipped about any possible future acquisitions, only hinting that private ownership could be a promising model for the industry.
Hydro-Québec, one of Innergex’s largest shareholders with a 20% stake, has agreed to vote in favor of the acquisition, alongside several Innergex executives and directors. Additionally, Letellier and Innergex’s CFO Jean Trudel will reinvest a portion of their shares into the privatized company, with a minimum of $15 million being rolled over.
The Caisse’s longstanding relationship with Innergex, dating back 30 years, has seen it become the company’s second-largest shareholder. CDPQ initially invested in Innergex before its public offering in 2007 and has continued to provide funding for the company’s projects. The Caisse is committed to owning $54 billion in low-carbon assets by the end of this year, further cementing its place as a leader in sustainable investments. Among its other green energy investments are Verene Energia, a 695-kilometer power transmission network in Brazil, and Invenergy Renewables LLC, the largest private developer and operator of wind and solar projects in North America.
With this latest acquisition, CDPQ is not only reinforcing its commitment to the clean energy transition but also positioning itself as a powerful player in the global renewable energy market.