April 11, 2011
Agreement Reached on Compensation for Star Lake Hydroelectric Assets
The Government of Newfoundland and Labrador has reached an agreement with Enel Green Power North America (Enel) and its subsidiaries on issues arising from the passage of the Abitibi-Consolidated Rights and Assets Act and related to the Star Lake hydroelectric project. Under the terms of the agreement, the province will provide $32.8 million in compensation to Enel.
“We are pleased to have reached an agreement on Star Lake that resolves all issues arising from the province’s expropriation of the hydroelectric generating power plant,” said the Honourable Shawn Skinner, Minister of Natural Resources. “The introduction of the Abitibi-Consolidated Rights and Assets Act was intended to protect assets for the people of Newfoundland and Labrador. These parties have acted in good faith towards our province, and as a result, we believe this is a fair settlement and the most appropriate action for the province to take.”
A compensation arrangement has also been reached with a consortium of lenders represented by Sun Life Assurance Company of Canada on their interests in the Star Lake hydroelectric project. Nalcor will assume a loan obligation of approximately $40 million, which will be supported through the Government of Newfoundland and Labrador.
Amendments to Section 10(2) of the Abitibi-Consolidated Rights and Assets Act limit compensation rights to other parties directly affected by the expropriation. These include CHI Hydroelectric Company Inc., a subsidiary of Enel; Fortis Properties Inc., a subsidiary of Fortis; and a consortium of lenders. Negotiations with Fortis Properties Inc. are ongoing.
“Our action on this file has been about Abitibi and the treatment of Newfoundlanders and Labradorians by this company,” added Minister Skinner. “We will continue to work with other companies who have been affected by our decision to expropriate to find an appropriate resolution which serves the interests of all.”
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Director of Communications
Department of Natural Resources
2011 04 11 2:00 p.m.