Domtar Corp. is selling its Ottawa-Gatineau hydroelectric assets to Energy Ottawa — the renewable energy subsidiary of Hydro Ottawa — for $45 million.

The sale is expected to close by Aug. 31, Domtar announced today.

The transaction includes Domtar's three power stations and its water rights in the area, as well as the company's equity stake in the Chaudiere Water Power Inc. ring dam consortium.

Domtar currently has 12 workers operating its hydro assets in Ottawa-Gatineau, and all are to become employees of a subsidiary of Energy Ottawa.

Montreal-based Domtar Corp., with 9,100 employees and annual sales of some US$5.6 billion, manufactures a wide variety of fibre-based products, including communication papers and specialty and packaging papers.

Hydro Ottawa said the move is part of its "strategic plan to pursue growth opportunities that are good for the environment, that provide reliable electricity to its customers and stable long-term returns to its shareholder, the City of Ottawa," according to a press release.

"We already own and operate three other hydroelectric plants at the Chaudière site," board chair Pierre Richard was quoted saying in the press release. "This acquisition increases our generating capacity at Chaudière from 17 megawatts to 38 megawatts of clean electricity, enough to power 28,000 homes every year."

Hydro Ottawa said its capacity at the Chaudière site could grow to 60 megawatts.