Mr. Mike Crawley reports

NORTHLAND POWER ANNOUNCES SIGNING OF CREDIT AGREEMENT FOR $5.0 BILLION PROJECT FINANCING AT HAI LONG OFFSHORE WIND PROJECT

Northland Power Inc.'s Hai Long offshore wind project in Taiwan has signed a credit agreement to secure 118 billion new Taiwan dollars long term over 20 years in non-recourse financing (equivalent of $5-billion). The weighted-average all-in interest cost for the term of the financing is expected to be approximately 5 per cent.

The non-recourse project financing will be provided by over 15 international and local lenders with support from multiple export credit agencies (ECAs) from six different countries. The project is expected to reach financial close shortly upon satisfaction of all relevant conditions precedent to the financing being achieved. Upon the achievement of financial close, total debt and equity required for the project are expected to be fully financed, which include future cash flows expected to be received from sell-down proceeds and precompletion revenues.

"Today's announcement is a major achievement for Northland, our partners, and the offshore wind industry globally and in Taiwan," said Mike Crawley, president and chief executive officer of Northland. "We are progressing yet another world-class offshore wind project despite a challenging market environment. The project will produce high-quality and stable cash flow over a 30-year period with further optimization opportunities. Offshore wind is necessary to meet global renewable energy demand in the years ahead, and Northland is one of the few companies able to originate, develop, finance, construct and operate such facilities."

Hai Long's total cost is projected to be approximately $9-billion, with financing from its $5-billion of non-recourse debt by the project lenders, approximately $1-billion of precompletion revenues and the remaining equity investment contributed by the project's partners. Northland's equity investment has been fully secured through funds raised under its at-the-market equity (ATM) program in 2022 and its minority stake sale to Gentari International Renewables Pte. Ltd., which is anticipated to close during the fourth quarter of 2023, subject to satisfaction of all closing conditions pursuant to the terms of the purchase and sale agreement. Upon closing of the sell-down transaction, Gentari will hold a 29.4-per-cent indirect equity interest in the project, and Northland will own 30.6 per cent, and will continue with the lead role in construction and operation.

"This financing is Northland's first in Asia and, once closed, will be the largest non-recourse offshore wind project financing to date in the region," said Pauline Alimchandani, Northland's chief financial officer. "We would like to thank the project team, our partners, and all the financial and capital providers for working together to achieve this significant milestone. Once operational, Hai Long is expected to provide significant, long-term contracted adjusted [earnings before interest, taxes, depreciation and amortization] and free cash flow to our business and shareholders."

Northland's interest in Hai Long is expected to generate a five-year average of approximately $230-million to $250-million of adjusted EBITDA (a non-international financial reporting standard measure) (4) and $75-million to $85-million of free cash flow (a non-IFRS measure) (4) per year once operational, delivering significant long-term value for Northland's shareholders. Hai Long's project financing is denominated primarily in new Taiwan dollars, along with Japanese yen and European euros. Interest rate exposures are being managed with a combination of fixed-rate tranches and long-term interest rate hedges in line with Northland's risk management strategy and project finance terms. Hai Long is also entering into currency hedges to manage foreign exchange exposures associated with certain construction contracts. In addition, Northland will use currency hedges to stabilize the Canadian dollar equivalent for a large portion of its projected repatriated cash distributions, projected through 2033, and will enter into additional hedges beyond this time period, on a continuing basis.

Hai Long is located approximately 45 to 70 kilometres off the Changhua coast in the Taiwan Strait and consists of two phases, Hai Long 2 and Hai Long 3, with an expected combined generating capacity of 1,022 megawatts. Hai Long 2A was awarded up to 300 megawatts of grid capacity under a feed-in tariff while Hai Long 2B and 3 were awarded up to 744 megawatts of grid capacity in Taiwan's first competitive price-based auction in 2018. Hai Long subsequently signed a CPPA for the 744-megawatt auction portion in 2022. The project has obtained all environmental approvals and its major construction permit, and has commenced with early construction work and fabrication for components. Completion of construction activities and full commercial operations are expected in 2026/2027. In addition, the project secured a 15-year operations and maintenance agreement with the turbine supplier, with options to extend.

Hai Long will play an important role in helping the government of Taiwan achieve its renewable energy target of 15 gigawatts of offshore wind to be constructed between 2026 and 2035. Once operational, Hai Long will be one of the largest offshore wind facilities in Asia and provide enough clean energy to power more than one million Taiwanese households.

Expected financial contribution from Oneida, Baltic Power and Hai Long

In 2023, Northland achieved or expects to achieve financial close on three projects: Oneida, Baltic Power and Hai Long. These projects have and/or will be financed through an aggregate equity investment by Northland, net of sell-down proceeds, of $1.75-billion. The net proceeds have been fully secured primarily through: ATM proceeds in 2022, corporate hybrid issuance in 2023, and available cash and liquidity on hand. Once all three projects are fully operational, anticipated by 2027, they are expected to collectively generate an aggregate adjusted EBITDA and free cash flow (non-IFRS measures) (4) of $570-million to $615-million (5, 6) and $185-million to $210-million (5, 6), respectively, resulting in significant value creation and accretion for Northland's shareholders.

(5) Based on a five-year annual average from the completion date.

(6) The projected adjusted EBITDA and free cash flow are presented to provide additional information relating to the project contributions to the company's results of operations. This information may not be appropriate for other purposes.

About Northland Power Inc.

Northland is a global power producer dedicated to helping the clean energy transition by producing electricity from clean renewable resources. Founded in 1987, Northland has a long history of developing, building, owning and operating clean and green power infrastructure assets, and is a global leader in offshore wind. In addition, Northland owns and manages a diversified generation mix, including onshore renewables and efficient natural gas energy, as well as supplies energy through a regulated utility.

Headquartered in Toronto, Canada, with global offices in eight countries, Northland owns or has an economic interest in approximately 3.2 gigawatts (net 2.7 gigawatts) of operating capacity. The company also has a significant inventory of projects in construction and in various stages of development encompassing approximately 16 gigawatts of potential capacity.

Publicly traded since 1997, Northland has common shares and Series 1 and Series 2 preferred shares that trade on the Toronto Stock Exchange under the symbols NPI, NPI.PR.A and NPI.PR.B, respectively.

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