Fibrek power deal adds $16 million EBITDA
May 8, 2012, Montreal - Fibrek Inc. has concluded an agreement for the sale of green energy produced at its cogeneration facilities in Saint-Félicien, QC to Hydro-Québec. The power purchase falls under the province's Distribution’s Power Purchase Program for electricity derived from forest biomass cogeneration.
Launched late in 2011, the program will allow the 33.23 MW of green energy currently produced by Fibrek to be sold to Hydro-Québec Distribution beginning on May 5, 2012 at a price of $106 per megawatt per hour, indexed to the consumer price index (CPI) for a 25-year period. The contract will generate approximately $16 million a year in EBITDA.
“This production will further increase the previously announced 9.56 MW that Fibrek will be supplying to the government corporation starting in December 2012. By the end of this year, the Saint-Félicien mill will be producing 42.79 MW in green energy for Hydro-Québec Distribution,” said Pierre Gabriel Côté, ceo.
“Revenue diversification is a key component of our business plan. In addition, increasing our green energy production fits well within our sustainable development plan and reflects our vision when it comes to innovation for growth,” Côté concluded.
Fibrek is investing approximately $37 million in the construction of a new power plant that will be used to produce the additional 9.56 MW. Over the long term, green energy production will ensure the competitive position of the Saint-Félicien NBSK pulp mill despite the challenges facing the pulp and paper industry.