Northland Power Income Fund said Thursday it will spend $145-million to build a natural-gas fired power plant in Saskatchewan.
The income trust said it has signed a 25-year power purchase agreement with Saskatchewan Power Corp. to provide peaking power.
The 86-megawatt plant will be built near Spy Hill, Sask., about 200 kilometres east of Regina. Construction is expected to begin in June, 2010, with commercial operations to begin no later than Dec. 1, 2011.
To pay for the new plant, Northland Power said it would raise $120-million in an offering of trust units and convertible debentures.
The fund said it has signed a deal with a group of underwriters led by CIBC for the sale of 5.8 million trust units at $10.35 per unit and $60 million in 6.25 per cent convertible unsecured subordinated debentures.
Northland Power has also granted the underwriters an option to purchase an additional 874,500 units and $9 million in debentures, at the same price. If the over-allotment option is exercised in full, the financing will total about $138 million.
The fund has ownership or interests in 10 power projects totalling over 1,100 megawatts.