Fibrek Signs Energy Supply Contract with Hydro-Quebec Distribution
May 4, 2012 (Press Release) - Fibrek Inc.'s CEO, Pierre Gabriel Cote, is proud to announce that Fibrek has concluded an agreement for the sale of green energy produced at its cogeneration facilities located at the Saint-Felicien mill in connection with Hydro-Quebec Distribution's Power Purchase Program for electricity derived from forest biomass cogeneration (PAE 2011-01), which was launched on December 20, 2011.
The 33.23 MW of green energy currently produced by Fibrek will 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-Felicien mill will be producing 42.79 MW in green energy for Hydro-Quebec Distribution," said Pierre Gabriel Cote.
"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," concluded Mr. Cote.
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-Felicien NBSK pulp mill despite the challenges facing the pulp and paper industry. The leadership demonstrated by the executive team in obtaining this new contract will consolidate jobs and secure the future of the mill.
SOURCE: Fibrek Inc.