Infrastructure and renewable power investments are equity investments with long-term financing, long-term contracts and returns that are generally higher than real estate loans or equity when equity investment is made prior to development. The renewable power sector is relatively new in Canada, although it has a long history elsewhere in the world.
Contracts for renewable power are typically with entities having a low credit risk and provide for the delivery of power at a fixed rate for between 20 and 25 years. The construction costs for renewable power assets are relatively predictable and the debt is typically limited in recourse to the particular asset. We benefit from Dream’s involvement in this industry over the last eight years, through which it has developed relationships with developers, manufacturers and lenders and a track record of identifying attractive transactions and executing on them.