Canadian electricity generating company Hydro-Québec has acquired a 19.9% stake in Innergex Renewable Energy by investing C$661m ($496m) through a private placement.

The private placement involves the issuance of 34.6 million Innergex common shares to Hydro-Québec.

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With this investment in Innergex, Hydro-Québec is forming a new strategic alliance in the renewable energy segment and to continue executing its growth strategy.

Innergex president and CEO Michel Letellier said: “This strategic alliance will be a key driver of growth for Innergex and we are extremely proud to announce this long-term partnership.

“Hydro-Québec and Innergex share common goals and values, as well as an appetite to grow in the global renewable energy sector. We are convinced that this partnership will drive both corporations to reach new heights in our fight against climate change.”

Out of C$661m ($496m) proceeds from the private placement, C$50m ($37.5m) will be used by Innergex to fund cash equity requirements for 200MW Hillcrest solar photovoltaic (PV) project located in Brown County, Ohio, US.

Innergex will use C$70m ($52.5m) to fund its 125MW of solar PV panels acquisition. This will allow approximately 650MW of projects to be eligible for the 30% US federal Investment Tax Credit (ITC).

Additionally, it will be using C$275m ($206m) to fund a potential acquisition of two operating projects that are located in Chile and the US.

Under the new partnership, Hydro-Québec has agreed to allocate $500m for co-investments in future renewable energy projects with Innergex across the globe.

Hydro-Québec president and CEO Éric Martel said: “Today’s announcement fits perfectly with our vision of leveraging our skills and investing in companies or projects with high potential for synergy with our business.

“The targets for these investments are sectors in which we excel, and this alliance will allow our know-how and our innovations to shine on a global scale.”

National Bank Financial and McCarthy Tétrault served as financial advisor and legal counsel respectively to Innergex.

RBC Capital Markets and Norton Rose Fulbright acted as financial advisor and legal counsel to Hydro-Québec.