Énergir needs money and its majority shareholder, the Caisse de dépôt et placement du Québec, is there. With the Fonds de solidarité FTQ, it is reinvesting 575 million in the company that is trying to reinvent itself.
This money will be used to accelerate Énergir’s decarbonization and resilience strategy, explained Emmanuel Jaclot, Senior Vice-President and Head of Infrastructure at the Caisse de dépôt, during an interview with The Press.
More specifically, this new injection of funds will be used to build a 1,200 megawatt wind farm on the Seigneurie de Beaupré site with Hydro-Québec, “a huge project,” according to Mr. Jaclot.
The money will also be used to build renewable natural gas production plants from manure with Nature Energy, and to strengthen Green Mountain Power’s electrical grid in Vermont, which has been hit by increasingly frequent outages.
The investment will help Énergir reduce the share of its revenues that depend on fossil fuels, which currently account for 60% of its total revenues. This is a joint investment with the Fonds de solidarité FTQ, which is injecting an amount equivalent to its minority interest of 19%, or $110 million.
The Fund is investing to support the decarbonization of Quebec and particularly Énergir’s activities in bioenergy, said its spokesperson Patrick McQuilken.
A long-term bet
The Caisse de dépôt is already criticized by environmentalists for its support for fossil natural gas as a transitional energy source. It persists and signs with this significant additional investment in Énergir.
“We’re talking about energy transition, not disruption,” explains Bertrand Millot, head of sustainable investments at the Caisse. “If we abandoned fossil gas, we would have a problem. That’s the economic reality,” he argues.
According to him, Énergir will play an important role in the energy transition with its agreement with Hydro-Québec to take over from electric heating during periods of extreme cold, “which will avoid the construction of five power plants like [celle de] “The Roman,” he illustrated.
The Caisse is not worried about a possible drop in Énergir’s profitability, which expects to lose 50% of the gas volumes it currently distributes in the medium term. “Our vision, which is long-term at the Caisse, is to think that this is not the case. In the end, being proactive in the transition will protect us,” says Emmanuel Jaclot. “We are supporting Énergir in new markets precisely to maintain its growth despite this energy transition.”
The new investment of $575 million from the Caisse and the Fonds de solidarité FTQ will not be used to maintain the gas network, but to finance Énergir’s new activities, the manager insisted.
The maintenance of the gas network is assured, he believes. In volume, we will sell less, but the services provided to the electricity system will increase in value, he explained.
The Caisse de dépôt has been a shareholder in Énergir since 2004. Over the years, it has invested a lot of money in the company, notably by buying out the shares of the other shareholders who have left the ship in turn, namely Enbridge, British Columbia Investment and the Université du Québec Pension Plan.
These investments have not increased in value, quite the contrary. In 2021, the Caisse paid $1.14 billion to buy back the 39% stake held by gas giant Enbridge. Currently, the fair market value of the Caisse’s 80% stake in Énergir is listed at $1.5 billion in its latest annual report.
Energize Today
1600 employees
9 billion assets
A look at Énergir
1957
Founding under the name Corporation du gaz naturel du Québec of the company which will later be known under the names Gaz Métropolitain, Gaz Métro and, since 2017, Énergir.
1986
Acquisition of Vermont Gas System, the state’s sole gas distributor
1997
Acquisition by Hydro-Québec of a 42% stake in Gaz Métropolitain, which will be resold to the Caisse de dépôt in 2004.
2007
Acquisition of Green Mountain Power, which distributes 70% of Vermont’s electricity.
2010
Restructuring and listing of part of the shares on the stock exchange under the name Valener. Enbridge holds 38.9% of the company’s shares.
2011
Acquisition of Central Vermont Public Service, Vermont’s largest electric utility.
2021
The Caisse bought Enbridge shares for 1.14 billion.
2022
A shareholder since 2004, the Caisse bought back the shares of two other pension funds, British Columbia Investment and the Université du Québec Pension Plan, to become the company’s main shareholder with an 80.9% stake. The Fonds de solidarité FTQ, also a shareholder since 2004, retained a 19.1% stake.