UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 20-F

 

☐   REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

x    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission file number: 001-35530

BROOKFIELD RENEWABLE PARTNERS L.P.

(Exact name of Registrant as specified in its charter)

Bermuda

(Jurisdiction of incorporation or organization)

73 Front Street, 5th Floor, Hamilton HM 12, Bermuda

(Address of principal executive offices)

 

Jane Sheere

73 Front Street, 5th Floor, Hamilton HM 12, Bermuda

Telephone: 441-294-3304

Facsimile: 441-296-4475

 

(Name, telephone, e-mail and/or facsimile number and address of company contact person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

  

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

178,821,204 Limited Partnership Units as of December 31, 2018

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes     x     No   ☐  

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.   Yes     ☐   No    S  

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes     S  No     ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes     S  No     ☐  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definitions of “accelerated filer”, “large accelerated filer”, and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check one):

 

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

 

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

☐ U.S. GAAP		x  International Financial Reporting Standards as   issued by the International Accounting Standards Board		☐  Other

If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow.   Item 17     ☐  Item 18     ☐  

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes   ☐ No    S  

  

 

INTRODUCTION AND USE OF CERTAIN TERMS  

Unless otherwise specified, information provided in this annual report on Form 20-F (this “ Form 20-F ”) is as of December 31, 2018. Unless the context requires otherwise, when used in this Form 20-F, the terms “Brookfield Renewable”, “we”, “us” and “our” refer to BEP, BRELP, the Holding Entities and the Operating Entities, each as defined in this Form 20-F, individually or collectively, as applicable; “BEP” refers to Brookfield Renewable Partners L.P.; and “Brookfield” refers to Brookfield Asset Management Inc. and its subsidiaries (other than Brookfield Renewable). All references to “our portfolio” include 100% of the capacity and energy of the facilities even though we do not own 100% of the economic output of such facilities (see the table under Item 4.B. “Business Overview — Our Operations” for details on our portfolio).

“ ABCA ” means the Business Corporations Act (Alberta) ,  R.S.A. 2000, c. B-9, as amended, including the regulations promulgated under such Act.

“ Adjusted EBITDA ” means revenues less direct costs (including energy marketing costs) and other income, before the effects of interest expense, income taxes, depreciation, management service costs, non-controlling interests, unrealized gain or loss on financial instruments, non-cash gain or loss from equity-accounted investments, distributions to preferred limited partners and other typical non-recurring items. Refer to “Cautionary Statement Regarding Use of Non-IFRS Measures”.

“ Affiliate ” or “ affiliate ” of any person is a person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such person.

“ Amended and Restated Limited Partnership Agreement of BEP ” means the fourth amended and restated limited partnership agreement of BEP, dated May 3, 2016, as further amended on May 25, 2016, February 14, 2017, January 16, 2018 and February 28, 2019.

“ Amended and Restated Limited Partnership Agreement of BRELP ” means the third amended and restated limited partnership agreement of BRELP, dated February 11, 2016, as further amended on May 25, 2016, February 14, 2017, January 16, 2018 and February 28, 2019.

“ ANEEL ” has the meaning given to it under Item 4.B “Business Overview — Brazilian Business”.

“ Audit Committee ” means the audit committee of the board of directors of the Managing General Partner.

“ Base Management Fee ” has the meaning given to it under Item 6.A “Directors and Senior Management — Our Master Services Agreement — Management Fee”.

“ Base Marketing Fee ” has the meaning given to it under Item 7.B “Related Party Transactions — Energy Marketing Agreement”.

“ BC Hydro ” means British Columbia Hydro and Power Authority.

“ BEM LP ” means Brookfield Energy Marketing LP, an indirect wholly-owned subsidiary of Brookfield Asset Management.

“ BEP ” means Brookfield Renewable Partners L.P., formerly named Brookfield Renewable Energy Partners L.P.

“ Bond Indenture ” means the amended and restated indenture, dated as of November 23, 2011, among Finco, The Bank of New York Mellon and BNY Trust Company of Canada, as amended and restated from time to time, governing the Finco Bonds.

“ BPUSHA ” means Brookfield Power US Holding America Co.

“ BRELP ” means Brookfield Renewable Energy L.P.

“ BRELP Class A Preferred Units ” means the Class A Preferred Limited Partnership Units, issuable in series, of BRELP.

“ BRELP General Partner ” means BRP Bermuda GP Limited, which serves as the general partner of BRELP GP LP.

“ BRELP GP LP ” means BREP Holding L.P., which serves as the general partner of BRELP.

“ BRELP Preferred Units ” means the preferred limited partnership units in the capital of BRELP.

“ BRELP Series 5 Preferred Units ” means the Class A Preferred Units, Series 5 of BRELP.

“ BRELP Series 7 Preferred Units ” means the Class A Preferred Units, Series 7 of BRELP.

“ BRELP Series 8 Preferred Units ” means the Class A Preferred Units, Series 8 of BRELP.

“ BRELP Series 9 Preferred Units ” means the Class A Preferred Units, Series 9 of BRELP.

“ BRELP Series 10 Preferred Units ” means the Class A Preferred Units, Series 10 of BRELP.

“ BRELP Series 11 Preferred Units ” means the Class A Preferred Units, Series 11 of BRELP.

“ BRELP Series 12 Preferred Units ” means the Class A Preferred Units, Series 12 of BRELP.

“BRELP Series 13 Preferred Units ” means the Class A Preferred Units, Series 13 of BRELP.

“BRELP Series 14 Preferred Units ” means the Class A Preferred Units, Series 14 of BRELP.

“ Brookfield ” means Brookfield Asset Management and its subsidiaries, or any one or more of them, as the context requires, other than entities within Brookfield Renewable.

“ Brookfield Accounts ” has the meaning given to it under Item 7.B “Related Party Transactions — Conflicts of Interest and Fiduciary Duties”.

“ Brookfield Asset Management ” means Brookfield Asset Management Inc.

“ Brookfield Personnel ” has the meaning given to it under Item 7.B “Related Party Transactions — Conflicts of Interest and Fiduciary Duties”.

“ Brookfield Renewable ” means BEP, BRELP, the Holding Entities and the Operating Entities, taken together, or any one or more of them, as the context requires.

“ Brookfield Renewable Power Assets ” means Brookfield’s renewable power assets (other than the assets held by the Fund) that were transferred to BEP on November 28, 2011.

“ BRP Equity ” means Brookfield Renewable Power Preferred Equity Inc.

“ BRPI ” means Brookfield Renewable Power Inc., an indirect wholly-owned subsidiary of Brookfield Asset Management.

“ CBCA ” means the Canada Business Corporations Act , R.S.C. 1985, c. C-44, as amended, including the regulations promulgated under such Act.

“ CDS ” means CDS Clearing and Depository Services Inc.

“ CEE Funds ” means the Germany based asset manager that holds renewable energy funds targeting low-risk renewable investments, which is a portfolio company of Brookfield Asset Management.

“ CFA ” means a “controlled foreign affiliate” as defined in the Tax Act.

“ Class A Preference Shares ” means BRP Equity’s Class A Preference Shares, issuable in series (which includes the Series 1, Series 2, Series 3, Series 4, Series 5 and Series 6 Preference Shares).

“ Class A Preferred Units ” means BEP’s Class A Preferred Limited Partnership Units, issuable in series (which includes the Series 5, Series 7, Series 8, Series 9, Series 10, Series 11, Series 12, Series 13 and Series 14 Preferred Units), of BEP.

“ Class B Preference Shares ” has the meaning given to it under Item 10.B “Memorandum and Articles of Association — BRP Equity”.

“ Code ” has the meaning given to it under Item 6.C “Board Practices — Code of Business Conduct and Ethics”.

“ CODM ” has the meaning given to it under Item 5.A “Operating Results — Financial Performance Review on Proportionate Information”.

“ Common Shares ” has the meaning given to it under Item 10.B “Memorandum and Articles of Association — BRP Equity”.

“ Conflicts Policy ” has the meaning given to it under Item 7.B “Related Party Transactions — Conflicts of Interest and Fiduciary Duties”.

“ CPI ” means the Canadian consumer price index.

“ CRA ” means the Canada Revenue Agency.

“ Customary Rates ” has the meaning given to it under Item 7.B “Related Party Transactions — Conflicts of Interest and Fiduciary Duties”.

“ DRIP ” means BEP’s distribution reinvestment plan.

“ DRS Statement ” has the meaning given to it under Item 4.B “Business Overview — Our LP Unit Distribution Reinvestment Plan”.

“ DTC ” means The Depository Trust Company.

“ EDGAR ” means the Electronic Data Gathering, Analysis, and Retrieval system administered by the SEC.

“ Energy Marketing Agreement ” has the meaning given to it under Item 7.B “Related Party Transactions — Energy Marketing Agreement”.

“ Energy Marketing Internalization ” has the meaning given to it under Item 7.B “Related Party Transactions — Energy Marketing Internalization”.

“ Energy Revenue Agreement ” has the meaning given to it under Item 7.B “Related Party Transactions — Energy Revenue Agreement”.

“ ESG ” means environmental, social and governance.

“ EURIBOR ” means the European Interbank Offered Rate.

“ Euro Holdco” means Brookfield BRP Europe Holdings (Bermuda) Limited.

“ E.U. ” means the European Union.

“ Exchange Act ” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“ FAPI ” means “foreign accrual property income” as defined in the Tax Act.

“ FATCA ” means the Foreign Account Tax Compliance provisions of the Hiring Incentives to Restore Employment Act of 2010.

“ FCPA ” has the meaning given to it under Item 3.D “Risk Factors — Risks Related to Our Operations and the Renewable Power Industry”.

“ FERC ” has the meaning given to it under Item 4.B “Business Overview — North American Business — United States”.

“ Finco ” means Brookfield Renewable Partners ULC, formerly named Brookfield Renewable Energy Partners ULC.

“ Finco Bonds ” means all outstanding bonds issued by Finco pursuant to the Bond Indenture.

“ Finco Bond Guarantors ” means, collectively, BEP, BRELP, NA Holdco, LATAM Holdco, Euro Holdco and Investco.

“ First Distribution Threshold ” has the meaning given to it under item 10.B “Memorandum and Articles of Association — Description of the Amended and Restated Limited Partnership Agreement of BRELP — Distributions”.

“ Fixed Amount ” has the meaning given to it under Item 7.B “Related Party Transactions — Energy Revenue Agreement”.

“ Foreign Tax Credit Generator Rules ” has the meaning given to it under Item 3.D “Risk Factors — Risks Related to Taxation — Canada”.

“ Form 20-F ” means this annual report filed on Form 20-F.

“ Fund ” means Brookfield Renewable Power Fund, a limited purpose trust established under the laws of the Province of Québec, and where appropriate, includes its subsidiaries. 

“ Funds From Operations ” means Adjusted EBITDA less interest, current income taxes, management service costs and distributions to preferred limited partners, before the effects of certain cash items (e.g. acquisition costs and other typical non-recurring cash items) and certain non-cash items (e.g. deferred income taxes, depreciation, non-cash portion of non-controlling interests, unrealized gain or loss on financial instruments, non-cash gain or loss from equity-accounted investments, and other non-cash items) as these are not reflective of the performance of the underlying business. Refer to “Cautionary Statement Regarding Use of Non-IFRS Measures”.

“ GLHA ” has the meaning given to it under Item 7.B “Related Party Transactions — Other Power Agreements”.

“ GLPL ” has the meaning given to it under Item 7.B “Related Party Transactions — Other Power Agreements”.

“ Governing Body ” in relation to an entity, means the board of directors or equivalent of such entity.

“ Government of Canada Yield ” on any date means the yield to maturity on such date (assuming semi-annual compounding) of a Canadian dollar denominated non-callable Government of Canada bond with a term to maturity of five years as quoted as of 10:00 a.m. (Toronto time) on such date and which appears on the Bloomberg Screen GCAN5YR Page on such date; provided that, if such rate does not appear on the Bloomberg Screen GCAN5YR Page on such date, the Government of Canada Yield will mean the average of the yields determined by two registered Canadian investment dealers selected by BRP Equity, as being the yield to maturity on such date (assuming semi-annual compounding) which a Canadian dollar denominated non-callable Government of Canada bond would carry if issued in Canadian dollars at 100% of its principal amount on such date with a term to maturity of five years.

“ GP Interest ” has the meaning given to it under Item 4.C “Organizational Structure — Organizational Chart”.

“ GW ” means gigawatt.

“ GWh ” means gigawatt hour.

“ Holder ” has the meaning given to it under Item 10.E “Taxation — Certain Material Canadian Federal Income Tax Considerations”.

“ Holding Entities ” means LATAM Holdco, NA Holdco, Euro Holdco, Investco and any other direct or indirect wholly-owned subsidiary of BRELP created or acquired after the date of the Amended and Restated Limited Partnership Agreement of BRELP.

“ HPI ” has the meaning given to it under Item 7.B “Related Party Transactions — Other Power Agreements”.

“ HSS&E ” has the meaning given to it under Item 4.B “Business Overview — Operating Philosophy”.

“ IASB ” means the International Accounting Standards Board.

“ IFRS ” means the International Financial Reporting Standards, as issued by the IASB.

“ Indirect CFA ” has the meaning given to it under Item 3.D “Risk Factors — Risks Related to Taxation — Canada”.

“ Investco ” means Brookfield Renewable Investments Limited.

“ Investing Affiliate ” has the meaning given to it under Item 7.B “Related Party Transactions — Conflicts of Interest and Fiduciary Duties”.

“ Investment Company Act ” means the United States Investment Company Act of 1940, as amended, and the rules and regulations promulgated under such Act.

“ IRS ” means the United States Internal Revenue Service.

“ Isagen ” means Isagen S.A. E.S.P.

“ LATAM Holdco ” means BRP Bermuda Holdings I Limited.

“ LIBOR ” means London Interbank Offered Rate.

“ Licensing Agreement ” has the meaning given to it under Item 7.B “Related Party Transactions — Licensing Agreement”.

“ LIHI ” has the meaning given to it under Item 4.B “Our Operations — Environmental, Social and Governance Management”.

“ LP Unitholders ” means holders of LP Units.

“ LP Units ” means the non-voting limited partnership units in the capital of BEP, other than the Preferred Units, including any LP Units issued pursuant to the Redemption-Exchange Mechanism.

“ LTA ” means long-term average.

“ Managing General Partner ” means Brookfield Renewable Partners Limited, which serves as BEP’s general partner.

“ Market Price ” means the volume weighted average of the trading price for our LP Units on the NYSE for the five trading days immediately preceding the date the relevant distribution is paid by BEP.

“ Master Services Agreement ” means the second amended and restated master management and administration agreement, dated February 26, 2015, as amended from time to time, among Brookfield Asset Management, BEP, BRELP, the Holding Entities, the Service Provider and others.

“ MI 61-101 ” has the meaning given to it under Item 7.B “Related Party Transactions — Conflicts of Interest and Fiduciary Duties”.

“ MPT ” has the meaning given to it under Item 7.B “Related Party Transactions — Other Power Agreements”.

“ MRE ” means the hydrological balancing pool administered by the government of Brazil.

“ MW ” means megawatt.

“ MWh ” means megawatt hour.

“ NA Holdco ” means Brookfield BRP Holdings (Canada) Inc.

“ Nominating and Governance Committee ” means the nominating and governance committee of the board of directors of the Managing General Partner.

“ Non-Controlled Affiliate ” has the meaning given to it under Item 7.B “Related Party Transactions — Conflicts of Interest and Fiduciary Duties”.

“ Non-Resident Entities ” has the meaning given to it under Item 3.D “Risk Factors — Risks Related to Taxation — Canada”.

“ Non-Resident Holder ” has the meaning given to it in Item 10.E “Taxation — Holders Not Resident in Canada”.

“ Non-Resident Subsidiaries ” has the meaning given to it under Item 3.D “Risk Factors — Risks Related to Taxation — Canada”.

“ Non-Resident Unitholders ” has the meaning given to it under Item 3.D “Risk Factors — Risks Related to Taxation — Canada”.

“ Non-U.S. Holder ” has the meaning given to it under Item 10.E “Taxation — Material U.S. Federal Income Tax Considerations”.

“ NYSE ” means the New York Stock Exchange.

“ OCI ” has the meaning given to it under Item 5.A “Operating Results — Critical Estimate, Accounting Policies and Internal Controls”.

“ Operating Entities ” means the subsidiaries of the Holding Entities which, from time to time, directly or indirectly hold, or may in the future hold, assets or operations, including any assets or operations held through joint ventures, partnerships and consortium arrangements.

“ Operating Performance Compensation ” has the meaning given to it under Item 7.B “Related Party Transactions — Conflicts of Interest and Fiduciary Duties”.

“ Original Bond Indenture ” has the meaning given to it in Item 10.B “Memorandum and Articles of Association — Finco — Bond Indenture and Guarantees”.

“ Ownership Requirement ” has the meaning given to it in Item 6.A “Directors and Senior Management — Director LP Unit Ownership Requirements”.

“ PFIC ” means a passive foreign investment company.

“ PJM ISO ” means the market operated by PJM Interconnection, L.L.C.

“ Power Agency Agreements ” has the meaning given to it under Item 7.B “Related Party Transactions — Power Agency Agreements”.

“ Power Marketing Purchase Agreement ” has the meaning given to it under Item 7.B “Related Party Transactions — Energy Marketing Internalization”.

“ PPA ” means a power purchase agreement, power guarantee agreement or similar long-term agreement between a seller and buyer of electrical power generation.

“ Preference Share Guarantees ”   means the guarantees granted by the Preference Share Guarantors in respect of the Series 1, Series 2, Series 3, Series 4, Series 5 and Series 6 Preference Shares.

“ Preference Share Guarantors ” means, collectively, BEP, BRELP, NA Holdco, LATAM Holdco, Euro Holdco and Investco.

“ Preference Shares ” means the Class A Preference Shares and the Class B Preference Shares.

“ Preferred Unit Guarantees ” means the guarantees granted by the Preferred Unit Guarantors in respect of the Series 5, Series 7, Series 8, Series 9, Series 10, Series 11, Series 12, Series 13 and Series 14 Preferred Units.   

“ Preferred Unit Guarantors ” means, collectively, BRELP, NA Holdco, LATAM Holdco, Euro Holdco and Investco.

“ Preferred Unitholders ” means holders of Preferred Units.

“ Preferred Units ” means the preferred limited partnership units in the capital of BEP.

“ PSG ” has the meaning given to it under Item 7.B “Related Party Transactions — Conflicts of Interest and Fiduciary Duties”.

“ QEF Election ” has the meaning given to it in Item 10.E “Taxation — Consequences to U.S. Holders — Passive Foreign Investment Companies”.

“ Qualifying Income Exception ” has the meaning given to it under Item 10.E “Taxation — Material U.S. Federal Income Tax Considerations — Partnership Status of BEP and BRELP”.

“ RDSP ” has the meaning given to it under Item 3.D “Risk Factors — Risks Related to Taxation — Canada”.

“ Redeemable/Exchangeable partnership unit ” means a limited partnership unit of BRELP that has the rights of the Redemption-Exchange Mechanism.

“ Redemption-Exchange Mechanism ” means the mechanism by which Brookfield may request redemption of its limited partnership interests in BRELP in whole or in part in exchange for cash,

subject to the right of Brookfield Renewable to acquire such interests (in lieu of such redemption) in exchange for LP Units.

“ REFIT”  means the Republic of Ireland’s Renewable Energy Feed-in Tariff 1 and Renewable Energy Feed-in Tariff 2 programs.

“ Registration Rights Agreement ” has the meaning given to it under Item 7.B “Related Party Transactions — Registration Rights Agreement”.

“ Regular Distribution Waterfall ” has the meaning given to it under Item 10.B “Memorandum and Articles of Association —Description of the Amended and Restated Limited Partnership Agreement of BRELP — Distributions”.

“ Relationship Agreement ” means the relationship agreement, dated November 28, 2011, by and among Brookfield Asset Management, BEP, BRELP, the Service Provider and others.

“ Relevant Foreign Tax Law ” has the meaning given to it under Item 10.E “Taxation — Certain Material Canadian Federal Income Tax Considerations — Taxation of Holders Resident in Canada — Computation of Income or Loss”.

“ Resident Holder ” means a Holder who, for the purposes of the Tax Act and at all relevant times, is or is deemed to be a resident of Canada.

“ RESP ” has the meaning given to it under Item 3.D “Risk Factors — Risks Related to Taxation — Canada”.

“ RPS ” has the meaning given to it under Item 4.B “Business Overview — Global Renewable Power Drivers”.

“ RRIF ” has the meaning given to it under Item 3.D “Risk Factors — Risks Related to Taxation — Canada”.

“ RRSP ” has the meaning given to it under Item 3.D “Risk Factors — Risks Related to Taxation — Canada”.

“ S&P ” means S&P Global Ratings Canada, a business unit of S&P Global Canada Corp.

“ Saeta ” means Saeta Yield S.A.

“ Sarbanes-Oxley Act ” means the United States Sarbanes-Oxley Act of 2002, including the rules and regulations promulgated thereunder.

“ SEC ” means the United States Securities and Exchange Commission.

“ Second Distribution Threshold ” has the meaning given to it under Item 10.B “Memorandum and Articles of Association — Description of the Amended and Restated Limited Partnership Agreement of BRELP — Distributions”.

“ Securities Act ” means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“ SEDAR ” means the System for Electronic Document Analysis and Retrieval administered by the Canadian Securities Administrators.

“ Series 1 Shares ” means the Class A Preference Shares, Series 1 of BRP Equity.

“ Series 2 Shares ” means the Class A Preference Shares, Series 2 of BRP Equity.

“ Series 3 Shares ” means the Class A Preference Shares, Series 3 of BRP Equity.

“ Series 4 Shares ” means the Class A Preference Shares, Series 4 of BRP Equity.

“ Series 5 Preferred Units ” means the Class A Preferred Units, Series 5 of BEP.

“ Series 5 Shares ” means the Class A Preference Shares, Series 5 of BRP Equity.

“ Series 6 Shares ” means the Class A Preference Shares, Series 6 of BRP Equity.

“ Series 7 Preferred Units ” means the Class A Preferred Units, Series 7 of BEP.

“ Series 8 Preferred Units ” means the Class A Preferred Units, Series 8 of BEP.

“ Series 9 Preferred Units ” means the Class A Preferred Units, Series 9 of BEP.

“ Series 10 Preferred Units ” means the Class A Preferred Units, Series 10 of BEP.

“ Series 11 Preferred Units ” means the Class A Preferred Units, Series 11 of BEP.

“ Series 12 Preferred Units ” means the Class A Preferred Units, Series 12 of BEP. 

“Series 13 Preferred Units ” means the Class A Preferred Units, Series 13 of BEP.

“Series 14 Preferred Units ” means the Class A Preferred Units, Series 14 of BEP.

“ Service Provider ” means BRP Energy Group L.P., Brookfield Renewable Energy Group (Bermuda) Limited, Brookfield Global Renewable Energy Advisor Limited and Brookfield Asset Management Private Institutional Capital Adviser (Canada), L.P., and, unless the context otherwise requires, includes any other affiliate of such entities that provides services to Brookfield Renewable pursuant to our Master Services Agreement or any other service agreement or arrangement.

“ Service Recipients ” means BEP, BRELP, the Holding Entities and, at the option of the Holding Entities, any Operating Entities.

“ SHPP ” means a small hydroelectric power plant, which is a category of hydro power facilities in Brazil with 30 MW of capacity or less.

“ SIFT Rules ” has the meaning given to it under Item 3.D “Risk Factors — Risks Related to Taxation — Canada”.

“ Tax Act ” means the Canadian Income Tax Act , R.S.C. 1985, c. 1. (5th Supp), as amended, including the regulations promulgated under such Act.

“ Tax Cuts and Jobs Act ” has the meaning given to it under Item 3.D “Risk Factors — Risks Related to Taxation — United States”.

“ Tax Proposals ” means all specific proposals to amend the Tax Act publicly announced by or on behalf of the Minister prior to the date hereof.

“ TerraForm Global ” means TerraForm Global, Inc.

“ TerraForm Power ” means TerraForm Power, Inc.

“ TFSA ” has the meaning given to it under Item 3.D “Risk Factors — Risks Related to Taxation — Canada”.

“ TJLP ” means Taxa de Juros de Longo Prazo.

“ Total Capitalization Value ” means, in any quarter, the sum of (i) the fair market value of an LP Unit multiplied by the number of LP Units issued and outstanding on the last trading day of the quarter (assuming full conversion of any limited partnership interests held by any member of Brookfield in BRELP into LP Units), plus (ii) for each class or series of security of a Service Recipient (other than LP Units) issued to third parties, the fair market value of such security multiplied by the number of securities of such class or series issued and outstanding on the last trading day of the quarter (calculated on a fully-diluted basis), plus (iii) the principal amount of all debt not captured by paragraph (ii) owed by each Service Recipient (excluding for this purpose any Operating Entity) on the last trading day of the quarter to any person that is not a member of Brookfield Renewable, which debt has recourse to any Service Recipient, less any amount of cash held by all Service Recipients (excluding for this purpose any Operating Entity) on such day.

“ Treasury Regulations ” means the Treasury regulations promulgated under the U.S. Internal Revenue Code.

“ Treaty ” means the Canada-United States Income Tax Convention (1980), as amended.

“ TSX ” means the Toronto Stock Exchange.

“ TWh ” means terawatt hour.

“ UBTI ” has the meaning given to it under Item 3.D “Risk Factors — Risks Related to Taxation — United States”.

“ U.K .” or “ United Kingdom ” means the United Kingdom of Great Britain and Northern Ireland.

“ Unitholders ” means LP Unitholders and Preferred Unitholders; provided that for purposes of Item 5. “Operating and Financial Review and Prospects” of this Form 20-F, “Unitholders” has the meaning given to it under Item 5.A “Operating Results —  Basis of Presentation”.

“ Units ” means LP Units and Preferred Units.

“ U.S. ” or “ United States ” means the United States of America.

“ U.S. Holder ” has the meaning given to it under Item 10.E “Taxation — Material U.S. Federal Income Tax Considerations”.

“ U.S. Internal Revenue Code ” means the United States Internal Revenue Code of 1986 , as amended.

“ Voting Agreement ” means the voting agreement, dated November 28, 2011, between BEP and Brookfield that provides BEP, through the Managing General Partner, with a number of voting rights, including the right to direct all eligible votes in the election of the directors of the BRELP General Partner.

FORWARD-LOOKING STATEMENTS

This Form 20-F contains forward-looking statements concerning the business and operations of Brookfield Renewable. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Forward-looking statements in this Form 20-F include statements regarding the quality of Brookfield Renewable’s assets and the resiliency of the cash flow they will generate, our anticipated financial performance, future commissioning of assets, contracted portfolio, technology diversification, acquisition opportunities, expected completion of acquisitions, future energy prices and demand for electricity, economic recovery, achieving long-term average generation, project development and capital expenditure costs, diversification of shareholder base, energy policies, economic growth, growth potential of the renewable asset class, our future growth prospects and distribution profile and our access to capital. In some cases, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “scheduled”, “estimates”, “intends”, “anticipates”, “believes”, “potentially”, “tends”, “continue”, “attempts”, “likely”, “primarily”, “approximately”, “endeavors”, “pursues”, “strives”, “seeks” or variations of such words and phrases, or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Although we believe that our anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information in this Form 20-F are based upon reasonable assumptions and expectations, we cannot assure you that such expectations will prove to have been correct. You should not place undue reliance on forward-looking statements and information as such statements and information involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information.

Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include, but are not limited to, the following:

·           changes to hydrology at our hydroelectric facilities, to wind conditions at our wind energy facilities, to irradiance at our solar facilities or to weather generally, as a result of climate change or otherwise, at any of our facilities;

·           volatility in supply and demand in the energy markets;

·           our inability to re-negotiate or replace expiring PPAs on similar terms;

·           increases in water rental costs (or similar fees) or changes to the regulation of water supply;

·           advances in technology that impair or eliminate the competitive advantage of our projects;

·           an increase in the amount of uncontracted generation in our portfolio;

·           industry risks relating to the power markets in which we operate;

·           the termination of, or a change to, the MRE balancing pool in Brazil;

·           increased regulation of our operations;

·           concessions and licenses expiring and not being renewed or replaced on similar terms;

·           our real property rights for wind and solar renewable energy facilities being adversely affected by the rights of lienholders and leaseholders that are superior to those granted to us;

·           increases in the cost of operating our plants;

·           our failure to comply with conditions in, or our inability to maintain, governmental permits;

·           equipment failures, including relating to wind turbines and solar panels;

·           dam failures and the costs and potential liabilities associated with such failures;

·           force majeure events;

·           uninsurable losses and higher insurance premiums;

·           adverse changes in currency exchange rates and our inability to effectively manage foreign currency exposure;

·           availability and access to interconnection facilities and transmission systems;

·           health, safety, security and environmental risks;

·           disputes, governmental and regulatory investigations and litigation;

·           counterparties to our contracts not fulfilling their obligations;

·           the time and expense of enforcing contracts against non-performing counter-parties and the uncertainty of success;

·           our operations being affected by local communities;

·           fraud, bribery, corruption, other illegal acts or inadequate or failed internal processes or systems;

·           our reliance on computerized business systems, which could expose us to cyber-attacks;

·           newly developed technologies in which we invest not performing as anticipated;

·           labor disruptions and economically unfavorable collective bargaining agreements;

·           our inability to finance our operations due to the status of the capital markets;

·           operating and financial restrictions imposed on us by our loan, debt and security agreements;

·           changes to our credit ratings;

·           our inability to identify sufficient investment opportunities and complete transactions;

·           the growth of our portfolio and our inability to realize the expected benefits of our transactions or acquisitions;

·           our inability to develop greenfield projects or find new sites suitable for the development of greenfield projects;

·           delays, cost overruns and other problems associated with the construction and operation of generating facilities and risks associated with the arrangements we enter into with communities and joint venture partners;

·           Brookfield’s election not to source acquisition opportunities for us and our lack of access to all renewable power acquisitions that Brookfield identifies;

·           we do not have control over all our operations or investments;

·           political instability or changes in government policy;

·           foreign laws or regulation to which we become subject as a result of future acquisitions in new markets;

·           changes to government policies that provide incentives for renewable energy;

·           a decline in the value of our investments in securities, including publicly traded securities of other companies;

·           we are not subject to the same disclosure requirements as a U.S. domestic issuer;

·           the separation of economic interest from control within our organizational structure;

·           the incurrence of debt at multiple levels within our organizational structure;

·           being deemed an “investment company” under the Investment Company Act;

·           the effectiveness of our internal controls over financial reporting;

·           our dependence on Brookfield and Brookfield’s significant influence over us;

·           the departure of some or all of Brookfield’s key professionals;

·           changes in how Brookfield elects to hold its ownership interests in Brookfield Renewable;

·           Brookfield acting in a way that is not in the best interests of BEP or our Unitholders; and

·           other factors described in this Form 20-F, including those set forth under Item 3.D “Risk Factors”, Item 4.B “Business Overview” and Item 5.A “Operating Results”.

We caution that the foregoing list of important factors that may affect future results is not exhaustive. The forward-looking statements represent our views as of the date of this Form 20-F and should not be relied upon as representing our views as of any date subsequent to the date of this Form 20-F. While we anticipate that subsequent events and developments may cause our views to change, we disclaim any obligation to update the forward-looking statements, other than as required by applicable law. For further information on these known and unknown risks, please see Item 3.D “Risk Factors”.

Historical Performance and Market Data

This Form 20-F contains information relating to our business as well as historical performance and market data. When considering this data, you should bear in mind that historical results and market data may not be indicative of the future results that you should expect from us.

Financial Information

The financial information contained in this Form 20-F is presented in U.S. dollars and, unless otherwise indicated, has been prepared in accordance with IFRS. All figures are unaudited unless otherwise indicated. In this Form 20-F, all references to “$” are to U.S. dollars. Canadian dollars, Brazilian

reais, Euros, Colombian pesos and British pounds sterling are identified as “C$”, “R$”, “€”, “COP” and “£” respectively.

CAUTIONARY STATEMENT REGARDING USE OF NON-IFRS MEASURES

This Form 20-F contains references to Adjusted EBITDA, Funds From Operations and Funds From Operations per Unit which are not generally accepted accounting measures under IFRS and therefore may differ from definitions of Adjusted EBITDA, Funds From Operations and Funds From Operations per Unit used by other entities. In particular, our definition of Funds From Operations may differ from the definition of funds from operations used by other organizations, as well as the definition of funds from operations used by the Real Property Association of Canada (“REALPAC”) and the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”), in part because the NAREIT definition is based on U.S. GAAP, as opposed to IFRS. We believe that Adjusted EBITDA, Funds From Operations and Funds From Operations per Unit are useful supplemental measures that may assist investors in assessing our financial performance. None of Adjusted EBITDA, Funds From Operations or Funds From Operations per Unit should be considered as the sole measure of our performance and should not be considered in isolation from, or as a substitute for, analysis of our financial statements prepared in accordance with IFRS. These non-IFRS measures reflect how we manage our business and, in our opinion, enable the reader to better understand our business. Reconciliations of each of Adjusted EBITDA, Funds From Operations and Funds From Operations per Unit to net income (loss) are presented in Item 5.A “Operating Results —  Financial Performance Review on Proportionate Information — Reconciliation of non-IFRS measures”.

PART I

ITEM 1.        IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2.       OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3.        KEY INFORMATION                    

3.A               SELECTED FINANCIAL DATA

The information in this section, excluding the operational information, Adjusted EBITDA, Funds From Operations and Funds From Operations per Unit set forth in the tables below, is derived from and should be read in conjunction with the audited consolidated financial statements of Brookfield Renewable as at December 31, 2018 and 2017, and for the years ended December 31, 2018, 2017 and 2016 and related notes which are included elsewhere in this Form 20-F. 

See Item 5. “Operating and Financial Review and Prospects,” Item 8. “Financial Information” and Item 18. “Financial Statements”.

Page 17  

HISTORICAL OPERATIONAL AND FINANCIAL INFORMATION

YEAR ENDED DECEMBER 31
(MILLIONS, EXCEPT AS NOTED)		2018		2017		2016		2015		2014
Operational information:
Capacity (MW)		17,419		16,369		10,731		7,284		6,707
Total generation (GWh)
Long-term average generation		51,971		42,334		38,982		24,467		22,315
Actual generation		52,056		43,385		34,071		23,332		22,548
Proportionate generation (GWh)
Long-term average generation		25,844		23,249		22,362		18,749		17,942
Actual generation		25,753		23,968		20,222		17,662		18,173
Average revenue ($ per MWh)		75		70		73		73		78
Additional financial information:
Net income (loss) attributable to
Unitholders (1)	$	42	$	(56)	$	(65)	$	3	$	114
Basic earnings (loss) per LP Unit (2)		0.13		(0.18)		(0.23)		0.01		0.42
Consolidated Adjusted EBITDA (3)(4)		2,223		1,751		1,499		1,224		1,219
Proportionate Adjusted EBITDA (3)(4)		1,323		1,142		942		907		1,008
Funds From Operations (3)		676		581		419		467		560
Funds From Operations per Unit (1)(3)		2.16		1.90		1.45		1.69		2.07
Distribution per LP Unit		1.96		1.87		1.78		1.66		1.55

⁽¹⁾          For the year ended December 31, 2018, weighted average LP Units, Redeemable/Exchangeable partnership units and GP interest totaled 312.6 million (2017: 305.8 million, 2016: 288.7 million, 2015: 275.6 million and 2014: 271.1 million).

⁽²⁾          Non-IFRS measures. See “Cautionary Statement Regarding Use of Non-IFRS Measures”.

 

FINANCIAL REVIEW FOR THE YEARS ENDED DECEMBER 31, 2018 TO 2014

The following table reconciles net income (loss) attributable to limited partners’ equity and earnings (loss) per LP Unit, the most directly comparable IFRS measures, to Funds From Operations, Funds From Operations per Unit and Adjusted EBITDA, all non-IFRS financial metrics for the years indicated:

											Per unit (1)
(MILLIONS, EXCEPT AS NOTED)		2018		2017		2016		2015		2014		2018		2017		2016		2015		2014
Net income (loss) attributable to:
Limited partners' equity	$	24	$	(32)	$	(36)	$	2	$	58	$	0.13	$	(0.18)	$	(0.23)	$	0.01	$	0.42
General partnership interest in a holding
subsidiary held by Brookfield		1		(1)		-		-		1		-		-		-		-		-
Participating non-controlling interests -
in a holding subsidiary - Redeemable/
Exchangeable units held by Brookfield		17		(23)		(29)		1		55		-		-		-		-		-
Net income (loss) attributable to Unitholders (1)	$	42	$	(56)	$	(65)	$	3	$	114	$	0.13	$	(0.18)	$	(0.23)	$	0.01	$	0.42
Depreciation		630		539		540		462		456		2.02		1.76		1.87		1.68		1.68
Foreign exchange and
unrealized financial instruments loss (gain)		2		47		(4)		8		(12)		0.01		0.15		(0.01)		0.03		(0.04)
Deferred income tax expense		(85)		25		(78)		(78)		(29)		(0.27)		0.08		(0.27)		(0.28)		(0.11)
Other		87		26		26		72		31		0.27		0.09		0.09		0.25		0.12
Funds From Operations (2)	$	676	$	581	$	419	$	467	$	560	$	2.16	$	1.90	$	1.45	$	1.69	$	2.07
Distributions attributable to:
Preferred limited partners equity		38		28		15		1		-
Preferred equity		26		26		25		30		38
Current income taxes		17		18		19		15		6
Interest expense - borrowings		486		407		402		346		353
Management service costs		80		82		62		48		51
Proportionate Adjusted EBITDA (2)(3)		1,323		1,142		942		907		1,008
Attributable to non-controlling interests		900		609		557		317		211
Consolidated Adjusted EBITDA (2)(3)		2,223		1,751		1,499		1,224		1,219
Weighted average Units outstanding (4)											312.6		305.8		288.7		275.6		271.1

⁽¹⁾                 Unitholders and per Unit include holders of the GP interest, Redeemable/Exchangeable partnership units, and LP Units.

⁽²⁾                 Non-IFRS measures. See “Cautionary Statement Regarding Use of Non-IFRS Measures”.

⁽³⁾                 Comparative figures have been conformed to the current year’s presentation.

⁽⁴⁾                 Includes GP interest, Redeemable/Exchangeable partnership units, and LP Units.

 

3.B              CAPITALIZATION AND INDEBTEDNESS

Not applicable.

3.C              REASONS FOR THE OFFER AND USE OF PROCEEDS

Not applicable.

3.D              RISK FACTORS

 

You should carefully consider the following factors in addition to the other information set forth in this Form 20-F. If any of the following risks actually occur, our business, financial condition, results of operations and prospects could be adversely affected and the value of our Units would likely decline, and you could lose all or part of your investment.

  

Risks Related to Our Operations and the Renewable Power Industry

Changes to hydrology at our hydroelectric facilities, wind conditions at our wind energy facilities, irradiance at our solar facilities or weather conditions generally, as a result of climate change or otherwise, at any of our facilities could materially adversely affect the volume of electricity generated.

The revenues generated by our facilities are correlated to the amount of electricity generated, which in turn is dependent upon available water flows and upon wind, irradiance and weather conditions generally. Hydrology, wind, irradiance and weather conditions have natural variations from season to season and from year to year and may also change permanently because of climate change or other factors.

If one or more of our generation facilities were to be subject in the future to flooding, extreme weather conditions (including severe wind and droughts), fires, natural disasters, or if unexpected geological or other adverse physical conditions were to develop at any of our generation facilities, the generation capacity of that facility could be significantly reduced or even eliminated. For example, our hydroelectric facilities depend on the availability of water flows within the   watersheds in which we operate and could be materially impacted by changes to hydrology patterns, such as droughts.  In the event of severe flooding, our hydrology facilities may be damaged. Wind energy and solar energy are highly dependent on weather conditions and, in particular, on wind conditions and irradiance, respectively. The profitability of a wind farm depends not only on observed wind conditions at the site, which are inherently variable, but also on whether observed wind conditions are consistent with assumptions made during the project development phase or when a given project was acquired. Similarly, projections of solar resources depend on assumptions about weather patterns, shading and irradiance, which are inherently uncertain and may not be consistent with actual conditions at the site. A sustained decline in water flow at our hydroelectric facilities or in wind conditions at our wind energy facilities or of irradiance at our solar facilities could lead to a material adverse change in the volume of electricity generated, revenues and cash flow.

Climate change may increase the frequency and severity of severe weather conditions and may have the long-term effect of changing weather patterns, which could result in more frequent and severe disruptions to our generation facilities. In addition, customers’ energy needs generally vary with weather conditions, primarily temperature and humidity. To the extent weather conditions are affected by climate change, customers’ energy use could increase or decrease depending on the duration and magnitude of changing weather conditions, which could adversely affect our business, results of operations and cash flows.

Weather conditions have also historically caused variability in sugarcane harvest. A decline in sugarcane supply caused by drought, frost or floods, to the sugar and ethanol mills that are the feedstock suppliers of our biomass cogeneration facilities, could limit the volume of electricity these facilities are able to generate.

Supply and demand in the energy market is volatile and such volatility could have an adverse impact on electricity prices and a material adverse effect on Brookfield Renewable’s assets, liabilities, business, financial condition, results of operations and cash flow. 

A portion of Brookfield Renewable’s revenues are tied, either directly or indirectly, to the wholesale market price for electricity in the markets in which Brookfield Renewable operates. Wholesale market electricity prices are impacted by a number of factors including: the price of fuel (for example, natural gas) that is used to generate electricity; the management of generation and the amount of excess generating capacity relative to load in a particular market; the cost of controlling emissions of pollution, including the cost of emitting CO ₂ ; the structure of the electricity market; and weather conditions (such as extremely hot or cold weather) that impact electrical load. More generally, there is uncertainty surrounding the trend in electricity demand growth, which is influenced by: macroeconomic conditions; absolute and relative energy prices; and energy conservation and demand-side management. Correspondingly, from a supply perspective, there are uncertainties associated with the timing of generating plant retirements – in part driven by environmental regulations – and with the scale, pace and structure of replacement capacity, again reflecting a complex interaction of economic and political pressures and environmental preferences. This volatility and uncertainty in the power market generally, including the non-renewable power market, could have a material adverse effect on Brookfield Renewable’s assets, liabilities, business, financial condition, results of operations and cash flow.

As our contracts expire, we may not be able to replace them with agreements on similar terms.

Certain PPAs in our portfolio will be subject to re-contracting in the future. If the price of electricity in power markets is declining at the time of such re-contracting, it may impact our ability to re-negotiate or replace these contracts on terms that are acceptable to us, or at all. In addition, a concentrated pool of potential buyers for electricity generated by our renewable energy facilities in certain jurisdictions may restrict our ability to negotiate favorable terms under new PPAs or existing PPAs that are subject to re-contracting. We cannot provide any assurance that we will be able to re-negotiate or replace these contracts once they expire, and even if we are able to do so, we cannot provide any assurance that we will be able to obtain the same prices or terms we currently receive. If we are unable to re-negotiate or replace these contracts, or unable to secure prices at least equal to the current prices we receive, our business, financial condition, results of operation and prospects could be adversely affected.

Conversely, certain of our sales will be made by facilities subject to indefinite term contracts with Brookfield (taking into account its rights of renewal) at fixed prices per MWh. Accordingly, with respect to those facilities, our ability to realize improved revenues due to increases in market prices may be limited.

A significant portion of the power we generate is sold under long-term PPAs with public utilities, industrial or commercial end-users and Brookfield, some of whom may not be rated by any rating agency. For example, approximately 18% of our economic exposure for 2019 (on a proportionate basis) is with Brookfield entities, the majority of which are not publicly rated and whose obligations are not guaranteed by Brookfield Asset Management, which reflects the Energy Marketing Internalization, including the associated amendments and transfers of certain power purchase and revenue support agreements. 

Increases in water rental costs (or similar fees) or changes to the regulation of water supply may impose additional obligations on Brookfield Renewable.

Water rights are generally owned or controlled by governments that reserve the right to control water levels or impose water-use requirements as a condition of license renewal that differ from those arrangements in place today. We are required to pay taxes, make rental payments or pay similar fees for use of water and related rights once our hydroelectric projects are in commercial operation. Significant increases in water rental costs or similar fees or changes in the way that governments regulate water supply could, if imposed at a material number of our assets in our portfolio, have a material adverse effect on our assets, liabilities, business, financial condition, results of operations and cash flow.

Advances in technology could impair or eliminate the competitive advantage of our projects.

Technology related to the production of renewable power and conventional power generation are continually advancing, resulting in a gradual decline in the cost of producing electricity. If advances in technology further reduce the cost of producing power, the competitive advantage of our existing projects

may be significantly impaired or eliminated and our assets, liabilities, business, financial condition, results of operations and cash flow could be materially and adversely affected as a result.

The amount of uncontracted generation in our portfolio may increase. 

As at December 31, 2018, approximately 75% of our generation (on a proportionate basis) was contracted over the following five years under long-term, fixed price contracts with creditworthy counterparties. In 2017 and 2018, approximately 90% of our generation (on a proportionate basis) was contracted in each of those calendar years. The portion of our portfolio that is uncontracted may increase gradually over time. While increases in uncontracted generation may allow us to be opportunistic and take advantage of high spot-market prices, it will also increase our exposure to variability in power prices, which could, in certain circumstances, have an adverse effect on our business, financial condition, results of operations and cash flows.   

There are general industry risks associated with the power markets in which we operate.

We currently operate in power markets in North America, South America, Europe and Asia, each of which is affected by competition, price, supply of and demand for power, the location of import/export transmission lines and overall political, economic and social conditions and policies. Our operations are also largely concentrated in a relatively small number of countries, and accordingly are exposed to country-specific risks (such as weather conditions, local economic conditions or political/regulatory environments) that could disproportionately affect us. A general and extended decline in the North American, South American, European or Asian economies, or in the economies of the specific countries in which we operate, or sustained conservation efforts to reduce electricity consumption, could have the effect of reducing demand for electricity and could thereby have an adverse effect on our business, financial condition, results of operations and cash flows.

The MRE could be terminated or changed or Brookfield Renewable’s reference amount revised downward.

In Brazil, hydroelectric power generators have access to the MRE, which seeks to stabilize hydrology by assuring that all participant plants in the MRE receive a reference amount of electricity, approximating long-term average regardless of the actual volume of energy generated. Substantially all our assets are part of that pool. In cases of nationwide drought, when the pool as a whole is in shortfall relative to the long-term average, an asset can expect to share the nationwide shortfall pro-rata with the rest of the pool. In addition, specific rules provide the minimum percentages of the reference amount of electricity that must be actually generated each year for assuring participation in the MRE. The energy reference amount is assessed yearly according to the criteria of such regulation, and can be adjusted positively or negatively. If the Brookfield Renewable reference amount is revised, our share of the balancing pool could be reduced. If the MRE is terminated or changed, Brookfield Renewable’s financial results would be more exposed to variations in hydrology at certain hydroelectric facilities in Brazil. In either case, this could have an adverse effect on our results of operations and cash flows.

Our operations are highly regulated and may be exposed to increased regulation which could result in additional costs to Brookfield Renewable.

Our generation assets are subject to extensive regulation by various government agencies and regulatory bodies in different countries at the federal, regional, state, provincial and local level. As legal requirements frequently change and are subject to interpretation and discretion, we may be unable to predict the ultimate cost of compliance with these requirements or their effect on our operations. Any new law, rule or regulation could require additional expenditure to achieve or maintain compliance or could adversely impact our ability to generate and deliver energy. Also, operations that are not currently regulated may become subject to regulation which could result in additional cost to our business. Further, changes in wholesale market structures or rules, such as generation curtailment requirements or limitations to access the power grid, could have a material adverse effect on our ability to generate revenues from our facilities. For example, in North America, many of our assets are subject to the operating and market-setting rules determined by independent system operators. These independent system operators could introduce rules that adversely impact our operations. With an increasing global focus and public sensitivity to environmental sustainability and environmental regulation becoming more

stringent, we could also be subject to increasing environmental related responsibilities and more onerous permitting requirements. These changes may result in increased costs to our operations.

There is a risk that our concessions and licenses will not be renewed.

We hold concessions and licenses and we have rights to operate our facilities which generally include rights to the land and water required for power generation. We generally expect that our concessions and licenses will be renewed. However, if we are not granted renewal rights, or if our concessions or licenses are renewed subject to conditions which impose additional costs, or impose additional restrictions such as setting a price ceiling for energy sales, our profitability and operational activity could be adversely impacted.

Our use and enjoyment of real property rights for our wind and solar renewable energy facilities may be adversely affected by the rights of lienholders and leaseholders that are superior to those of the grantors of those real property rights to us.

Wind and solar renewable energy facilities generally are and are likely to be located on land occupied by the facility pursuant to long-term easements and leases. The ownership interests in the land subject to these easements and leases may be subject to mortgages securing loans or other liens (such as tax liens) and other easement and lease rights of third parties (such as leases of oil or mineral rights) that were created prior to the facility’s easements and leases. As a result, the facility’s rights under these easements or leases may be subject, and subordinate, to the rights of those third parties. Although we take certain measures to protect ourselves against these risks, such measures may, however, be  inadequate  to  protect  us  against  all  risk of loss  of  our  rights  to  use  the  land  on  which  our  wind and solar renewable energy facilities are located, which could have a material adverse effect on our business, financial  condition  and  results  of  operations. 

The cost of operating our plants could increase for reasons beyond our control.

While we currently maintain an appropriate and competitive cost position, there is a risk that increases in our cost structure that are beyond our control could materially adversely impact our financial performance. Examples of such costs include compliance with new conditions imposed during a relicensing process, municipal property taxes, water rental fees and the cost of procuring materials and services required for our maintenance activities.

We may fail to comply with the conditions in, or may not be able to maintain, our governmental permits.

Our generation assets and construction projects are required to comply with numerous supranational (in the case of the E.U.), federal, regional, state, provincial and local statutory and regulatory standards and to maintain numerous licenses, permits and governmental approvals required for operation. Some of the licenses, permits and governmental approvals that have been issued to our operations contain conditions and restrictions, or may have limited terms. If we fail to satisfy the conditions or comply with the restrictions imposed by our licenses, permits and governmental approvals, or the restrictions imposed by any statutory or regulatory requirements, we may become subject to regulatory enforcement or be subject to fines, penalties or additional costs or revocation of regulatory approvals, permits or licenses. In addition, if we are not able to renew, maintain or obtain all necessary licenses, permits and governmental approvals required for the continued operation or further development of our projects, the operation or development of our assets may be limited or suspended. Our failure to renew, maintain or obtain all necessary licenses, permits or governmental approvals may have a material adverse effect on our assets, liabilities, business, financial condition, results of operations and cash flow.

We may experience equipment failure, including failures relating to wind turbines and solar panels.

Our generation assets may not continue to perform as they have in the past and there is a risk of equipment failure due to wear and tear, latent defect, design error, operator error or early obsolescence, among other things, which could have a material adverse effect on our assets, liabilities, business, financial condition, results of operations and cash flow. Wind turbines and solar panels have shorter lifespans than hydroelectric assets.  Spare parts for wind turbines and solar facilities and key pieces of

equipment may be difficult to acquire as a result of a limited number of suppliers of solar panels, inverters, modules, turbines, towers and other system components and equipment associated with wind and solar power plants. In addition, warranties on equipment provided to TerraForm Power or TerraForm Global by their former sponsor or any of its affiliates likely will not be available to cover all or a portion of the expense associated with faulty equipment as a result of the bankruptcy of their former sponsor. Any resulting delay in replacing equipment could result in significant delays in returning facilities to full operation, which could adversely impact our business and financial condition.   

The occurrence of dam failures could result in a loss of generating capacity and damage to the environment, third parties or the public, which could require us to expend significant amounts of capital and other resources and expose us to significant liability.

The occurrence of dam failures at any of our hydroelectric generating stations or the occurrence of dam failures at other generating stations or dams operated by third parties whether upstream or downstream of our hydroelectric generating stations could result in a loss of generating capacity until the failure has been repaired. If the failure is at one of our facilities, repairing such failure could require us to expend significant amounts of capital and other resources. Such failures could result in damage to the environment or damages and harm to third parties or the public, which could expose us to significant liability.  A dam failure at a generating station or dam operated by a third party could result in new and potentially onerous regulations that could impact Brookfield Renewable’s facilities. Any such new regulations could require material capital expenditures to maintain compliance and our financial position could be adversely affected.

We may be exposed to force majeure events.

The occurrence of a significant event that disrupts the ability of our generation assets to produce or sell power for an extended period, including events which preclude customers from purchasing electricity, could have a material adverse effect on our assets, liabilities, business, financial condition, results of operations and cash flow. In addition, force majeure events affecting our assets could result in damage to the environment or harm to third parties or the public, which could expose us to significant liability. Our generation assets could be exposed to severe weather conditions, natural disasters and potentially catastrophic events.  An assault or an act of malicious destruction, cyber-attacks, sabotage or terrorism committed on our generation assets could also disrupt our ability to generate or sell power. In certain cases, there is the potential that some events may not excuse Brookfield Renewable from performing its obligations pursuant to agreements with third parties and therefore may expose Brookfield Renewable to liability. In addition, many of our generation assets are located in remote areas which may make access for repair of damage difficult.

We may be exposed to uninsurable losses and may become subject to higher insurance premiums.

While we maintain certain insurance coverage, such insurance may not continue to be offered on an economically feasible basis, may not cover all events that could give rise to a loss or claim involving our assets or operations, and may not cover all of our assets. If our insurance coverage is insufficient and we are forced to bear such losses or claims, our financial position could be materially and adversely affected.  In addition, Brookfield Renewable participates in certain shared insurance arrangements with Brookfield, allowing us to benefit from lower premiums and other economies of scale. In particular, we share third party excess liability, crime, employee dishonesty, director and officer, and errors and omissions insurance coverage. Under such shared policies, claim limits may also be shared between us and Brookfield meaning that any claim by one insured party in a given year reduces the amount that each other insured party can claim. Consequently, there is a risk that Brookfield Renewable’s ability to claim in a given year could be eroded by claims made by Brookfield affiliates who are also covered by a shared policy but that are not part of Brookfield Renewable, which could have an adverse effect on our financial position. Our insurance policies may cover losses as a result of certain types of natural disasters or sabotage, among other things, but such coverage is not always available in the insurance market on commercially reasonable terms and is often capped at predetermined limits that may not be adequate. Our insurance policies are subject to review by our insurers and may not be renewed on similar or favorable terms or at all. 

We are subject to foreign currency risk which may adversely affect the performance of our operations and our ability to manage such risk depends, in part, on our ability to implement an effective hedging strategy.

A significant portion of our current operations are in countries where the U.S. dollar is not the functional currency. These operations pay distributions in currencies other than the U.S. dollar, which we must convert to U.S. dollars prior to making such distributions. A significant depreciation in the value of such foreign currencies, measures introduced by foreign governments to control inflation or deflation, currency exchange or export controls may have a material adverse effect on our business, financial condition, results of operations and cash flows. When managing our exposure to currency risks, we use foreign currency forward contracts and other strategies to mitigate currency risk and there can be no assurances that these strategies will be successful.

The ability to deliver electricity to our various counterparties requires the availability of and access to interconnection facilities and transmission systems.

Our ability to sell electricity is impacted by the availability of, and access to, the various transmission systems to deliver power to its contractual delivery point and the arrangements and facilities for interconnecting the generation projects to the transmission systems. The absence of this availability and access, our inability to obtain reasonable terms and conditions for interconnection and transmission agreements, the operational failure or decommissioning of existing interconnection facilities or transmission facilities, the lack of adequate capacity on such interconnection or transmission facilities, curtailment as a result of transmission facility downtime, or the failure of any relevant jurisdiction to expand transmission facilities, may have a material adverse effect on our ability to deliver electricity to our various counterparties or the requirement of counterparties to accept and pay for energy delivery, which could materially and adversely affect our assets, liabilities, business, financial condition, results of operations and cash flow.

Our operations are exposed to health, safety, security and environmental risks.

The ownership, construction and operation of our generation assets carry an inherent risk of liability related to health, safety, security and the environment, including the risk of government imposed orders to remedy unsafe conditions and/or to remediate or otherwise address environmental contamination or damage. We could also be exposed to potential penalties for contravention of health, safety, security and environmental laws and potential civil liability. In the ordinary course of business we incur capital and operating expenditures to comply with health, safety, security and environmental laws, to obtain and comply with licenses, permits and other approvals and to assess and manage related risks. The cost of compliance with these laws (and any future laws or amendments enacted) may increase over time and result in additional material expenditures. We may become subject to government orders, investigations, inquiries or other proceedings (including civil claims) relating to health, safety, security and environmental matters as a result of which our operations may be limited or suspended. The occurrence of any of these events or any changes, additions to or more rigorous enforcement of health, safety, security and environmental laws could have a material and adverse impact on operations and result in additional material expenditures. Additional environmental, health and safety issues relating to presently known or unknown matters may require unanticipated expenditures, or result in fines, penalties or other consequences (including changes to operations) that may be material and adverse to our business and results of operations.

We may be involved in disputes, governmental and regulatory investigations and possible litigation.

In the normal course of our operations, Brookfield Renewable is involved in various legal actions that could expose it to liability for damages and potential negative publicity associated with such legal actions. The outcome with respect to outstanding, pending or future actions cannot be predicted with certainty and may be adverse to us and as a result could have a material adverse effect on our assets, liabilities, business, financial condition, results of operations, cash flow and reputation. We and our affiliates are subject to governmental or regulatory investigations from time to time. Governmental and regulatory investigations, regardless of their outcome, are generally costly, divert management attention, and have the potential to damage our reputation.  The unfavorable resolution of any governmental or

regulatory investigation could result in criminal liability, fines, penalties or other monetary or non-monetary remedies and could materially affect our business or results of operations.

Counterparties to our contracts may not fulfill their obligations

              If, for any reason, any of the purchasers of power under our PPAs, including Brookfield, are unable or unwilling to fulfill their contractual obligations under the relevant PPA or if they refuse to accept delivery of power pursuant to the relevant PPA, our assets, liabilities, business, financial condition, results of operations and cash flow could be materially and adversely affected as we may not be able to replace the agreement with an agreement on equivalent terms and conditions. External events, such as a severe economic downturn, could impair the ability of some counterparties to the PPAs or some customers to pay for electricity received.  In addition, inadequate performance by counterparties to operation and maintenance contracts related to certain of our assets or investments may increase the risk of operational or mechanical failures of such facilities.

Seeking to enforce a contract through the courts may take significant amounts of time and expense with no certainty of success.

Our business could be adversely affected if we are required to enforce contracts through the courts and we are unsuccessful or incur significant amounts of time and expenses seeking to do so. High litigation costs and long delays make resolving commercial disputes in court time consuming and expensive.  Such costs can be difficult to calculate with certainty.  In addition, in certain jurisdictions in which we currently conduct business or may seek to conduct business in the future, there can be uncertainty regarding the interpretation and application of laws and regulations relating to the enforceability of contractual rights.

The operation of our generating facilities could be affected by local communities.

We may become impacted by the interests of local communities and stakeholders, including in some cases, Indigenous peoples, that affect the operation of our facilities. Certain of these communities may have or may develop interests or objectives which are different from or even in conflict with our objectives, including the use of our project lands and waterways near our facilities. Any such differences could have a negative impact on the successful operation of our facilities. As well, disputes surrounding, and settlements of, Indigenous land claims regarding lands on or near our generating assets could interfere with operations and/or result in additional operating costs or restrictions, as well as adversely impact the use and enjoyment of our real property rights with respect to our generating assets.

We may suffer a significant loss resulting from fraud, bribery, corruption, other illegal acts, inadequate or failed internal processes or systems, or from external events.

We may suffer a significant loss resulting from fraud, bribery, corruption, other illegal acts, inadequate or failed internal processes or systems, or from external events, such as security threats affecting our ability to operate. We operate in multiple jurisdictions and it is possible that our operations will expand into new jurisdictions.  Doing business in multiple jurisdictions requires Brookfield Renewable to comply with the laws and regulations of the U.S. government as well as those of various non-U.S. jurisdictions. These laws and regulations may apply to Brookfield Renewable, our Service Provider, our subsidiaries, individual directors, officers, employees and third-party agents. In particular, our non-U.S. operations are subject to U.S. and foreign anti-corruption laws and regulations, such as the Foreign Corrupt Practices Act of 1977, as amended (“FCPA”). The FCPA, among other things, prohibits companies and their officers, directors, employees and third-party agents acting on their behalf from corruptly offering, promising, authorizing or providing anything of value to foreign officials for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment. Brookfield Renewable and its officers, directors, employees and third-party agents regularly deal with government bodies and government owned and controlled businesses, the employees and representatives of which may be considered foreign officials for purposes of the FCPA. Also, as we make acquisitions, we may expose ourselves to FCPA or other corruption related risks if our due diligence processes are unable to uncover or detect violations of applicable anti-corruption laws.

We rely on our infrastructure, controls, systems and personnel, as well as central groups focusing on enterprise-wide management of specific operational risks such as fraud, trading, outsourcing, and

business disruption, to manage the risk of illegal and corrupt acts or failed systems. We also rely on our employees and certain third parties to comply with our policies and processes as well as applicable laws. Specific programs, policies, standards, methodologies and training have been developed to support the management of these risks and, as we expand into new markets and make new investments, we update and implement our programs, policies, standards, methodologies and training to address the risks that we perceive. The failure to adequately identify or manage these risks could result in direct or indirect financial loss, regulatory censure and/or harm to the reputation of Brookfield Renewable.  The acquisition of businesses with weak internal controls to manage the risk of illegal or corrupt acts may create additional risk of financial loss, regulatory censure and/or harm to the reputation of Brookfield Renewable. In addition, programs, policies, standards, methodologies and training, no matter how well designed, do not provide absolute assurance of effectiveness.

We rely on computerized business systems, which could expose us to cyber-attacks.

Our business relies on information technology. In addition, our business relies upon telecommunication services to remotely monitor and control our assets and interface with regulatory agencies, wholesale power markets and customers. The information and embedded systems of key business partners, including suppliers of the information technology systems on which we rely, and regulatory agencies are also important to our operations. In light of this, we may be subject to cyber security risks or other breaches of information technology security intended to obtain unauthorized access to our proprietary information and that of our business partners, destroy data or disable, degrade, or sabotage these systems through the introduction of computer viruses, fraudulent emails, cyber attacks and other means, and such breaches could originate from a variety of sources including our own employees or unknown third parties. There can be no assurance that measures implemented to protect the integrity of these systems will provide adequate protection, and any such breach of our information technology could go undetected for an extended period of time. A breach of our cyber security measures or the failure or malfunction of any of our computerized business systems, associated backup or data storage systems could cause us to suffer a disruption in one or more parts of our business and experience, among other things, financial loss, a loss of business opportunities, misappropriation or unauthorized release of confidential or personal information, damage to our systems and those with whom we do business, violation of privacy and other laws, litigation, regulatory penalties and remediation and restoration costs as well as increased costs to maintain our systems. For example, the European General Data Protection Regulation, which came into effect in May 2018, includes stringent operational requirements for entities processing personal information and significant penalties for non-compliance. Cyber-security breaches or failures of our information technology systems could have a material adverse effect on our business operations, financial reporting, financial condition and results of operations, and result in reputational damage.

There can be no guarantee that newly developed technologies that we invest in will perform as anticipated.

We may invest in and use newly developed, less proven, technologies in our development projects or in maintaining or enhancing our existing assets. There is no guarantee that such new technologies will perform as anticipated. The failure of a new technology to perform as anticipated may materially and adversely affect the profitability of a particular development project or existing asset.

Performance of our Operating Entities may be harmed by future labor disruptions and economically unfavorable collective bargaining agreements.

Certain of BEP’s subsidiaries are parties to collective agreements that expire periodically and those subsidiaries may not be able to renew their collective agreements without a labor disruption or without agreeing to significant increases in cost. In the event of a labor disruption such as a strike or lock-out, the ability of our generation assets to generate electricity may be impaired and our results from operations and cash flow could be materially and adversely affected.

The economic viability of the feedstock supplier of our biomass cogeneration facilities is linked to the market price for sugar and ethanol, and the prices of these commodities are cyclical and are affected by general economic conditions in Brazil and globally.

            The principal feedstock of our 175 MW biomass cogeneration facilities is “bagasse” – a dry, fibrous residue left after the extraction of juice from sugar cane. The biomass cogeneration facilities that we own are attached to mills that are suppliers of the bagasse, which they provide to these facilities in exchange for some of the steam and electricity that the facilities produce. The excess electricity that is not delivered to the relevant mill is sold under contract to commercial offtakers, to the government by way of a regulated auction process or directly into the market. The viability of these mills depends on prevailing market prices for ethanol and sugar as well as other factors that are out of our control. Two of the mills depend on a single supplier of bagasse, who is the owner of each of these mills. The supplier of these two mills, and therefore of two of our biomass cogeneration facilities, is currently in financial distress and in judicial reorganization in Brazil and if such supplier becomes unavailable, we would have to procure bagasse from other sources, which could have a material adverse effect on the value of this investment.

Risks Related to Financing

Our ability to finance our operations is subject to various risks relating to the state of the capital markets.

We expect to finance future acquisitions, the development and construction of new facilities and other capital expenditures out of cash generated from our operations, capital recycling, debt and possible future issuances of equity. There is debt throughout our corporate structure that will need to be replaced from time to time: BEP, BRELP and the Holding Entities have corporate debt and many Operating Entities have limited recourse project level debt (which is non-recourse to BEP). Our ability to obtain debt or equity financing to fund our growth, and our ability to refinance existing indebtedness, is dependent on, among other factors, the overall state of the capital markets (as well as local market conditions, particularly in the case of non-recourse financings), continued operating performance of our assets, future electricity market prices, the level of future interest rates, lenders ’ and investors’ assessment of our credit risk, capital markets conditions and investor appetite for investments in renewable energy and infrastructure assets in general and in Brookfield Renewable’s securities in particular. Also, Brookfield Renewable’s financing agreements contain conditions that limit our ability to repay indebtedness prior to maturity without incurring penalties, which may limit our ability to raise capital and financing on favorable terms. To the extent that external sources of capital become limited or unavailable or available on onerous terms, our ability to fund acquisitions and make necessary capital investments to construct new or maintain existing facilities will be impaired, and as a result, our business, financial condition, results of operations and prospects may be materially and adversely affected.

We are subject to operating and financial restrictions through covenants in our loan, debt and security agreements.

Brookfield Renewable is subject to operating and financial restrictions through covenants in our loan, debt and security agreements. These restrictions prohibit or limit our ability to, among other things, incur additional debt, provide guarantees for indebtedness, grant liens, dispose of assets, liquidate, dissolve, amalgamate, consolidate or effect corporate or capital reorganizations, declare distributions, issue equity interests, and create subsidiaries. A financial covenant in our corporate bonds and in our corporate bank credit facilities limits our overall indebtedness to a percentage of total capitalization, a restriction which may limit our ability to obtain additional financing, withstand downturns in our business and take advantage of business and development opportunities. If we breach our covenants, our credit facilities may be terminated or come due and such event may cause our credit rating to deteriorate and subject Brookfield Renewable to higher interest and financing costs. From time to time, we also acquire businesses and assets that have debt obligations that are in default, including assets acquired as part of the TerraForm Global transaction. We may also be required to seek additional debt financing on terms that include more restrictive covenants, require repayment on an accelerated schedule or impose other obligations that limit our ability to grow our business, acquire needed assets or take other actions that we might otherwise consider appropriate or desirable.

Changes in our credit ratings may have an adverse effect on our financial position and ability to raise capital.