TransAlta Corporation (TransAlta) has formed an agreement with its renewable unit TransAlta Renewables for an investment of approximately C$540m ($404m).

Under the agreement, TransAlta Renewables will be investing the capital for the parent company owned Sarnia cogeneration facility, Le Nordais wind farm and Ragged Chute hydro facility.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

Located in Canadian provinces of Ontario and Quebec, the facilities have a combined generation capacity of around 611MW.

The agreed investment will include acquisition of securities, which will be linked to the net distributable profits of the assets.

"We are pleased to have AIMCo, a high-performance investment manager with global experience, join us as a significant investor in TransAlta Renewables."

TransAlta has also signed a separate agreement with Alberta Investment Management (AIMCo) to sell up to C$200m ($149.5m) of common shares for TransAlta Renewables.

Following the AIMCo deal, TransAlta will retain around 65% stake in its renewable unit and intends to continue management and operation of its assets.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

The two concurrent transactions are expected to generate $350m as cash proceeds for TransAlta, with which the firm intends to pay off its debts and strengthen its portfolio.

TransAlta president and CEO Dawn Farrell said: "With the proceeds from the transactions announced today, together with the Australian transaction that was completed in May of this year, we will achieve our debt reduction target for the year by generating cash proceeds of approximately $575m.

"In addition, we are pleased to have AIMCo, a high-performance investment manager with global experience, join us as a significant investor in TransAlta Renewables."

Earlier in the year, the Canadian energy giant had acquired around 71MW of long-term contracted renewable generation assets from an affiliate of Rockland Capital for $75.8m.