Innergex Renewable Energy : Quarterly report (Q3) for the period ended September 30, 2017

INNERGEX RENEWABLE ENERGY INC.‌‌

FOR THE PERIOD ENDED

These condensed consolidated financial statements have neither been audited nor reviewed by the Corporation's independent auditors.‌‌‌‌‌‌‌‌‌‌‌‌

Innergex Renewable Energy Inc. is a leading Canadian independent renewable power producer. Active since 1990, the Corporation develops, owns, and operates run-of-river hydroelectric facilities, wind farms and solar photovoltaic farms and carries out its operations in Quebec, Ontario and British Columbia in Canada, in France and in Idaho, USA. The Corporation's shares are listed on the Toronto Stock Exchange ("TSX") under the symbols INE, INE.PR.A and INE.PR.C and its convertible debentures under the symbol INE.DB.A.

Innergex's mission is to increase its production of renewable energy by developing and operating high- quality facilities while respecting the environment and balancing the best interests of the host communities, its partners and its investors.

This Management's Discussion and Analysis ("MD&A") is a discussion of the operating results, cash flows and financial position of Innergex Renewable Energy Inc. ("Innergex" or the "Corporation") for the three- and nine-month periods ended September 30, 2017, and reflects all material events up to November 9, 2017, the date on which this MD&A was approved by the Corporation's Board of Directors.

The MD&A should be read in conjunction with the unaudited condensed consolidated financial statements and the accompanying notes for the three- and nine-month periods ended September 30, 2017, and with the Corporation's Financial Review at December 31, 2016.

The unaudited condensed consolidated financial statements attached to this MD&A and the accompanying notes for the three- and nine-month periods ended September 30, 2017, along with the 2016 comparative figures, have been prepared in accordance with International Financial Reporting Standards ("IFRS"). Some amounts included in this MD&A have been rounded to make reading easier, which may affect some calculations.

• Production was 90% of the long-term average ("LTA") for the third quarter and 91% of the LTA for the nine-month period ended September 30, 2017.

• Revenues increased 56% to $108.2 million in the third quarter and 33% to $292.3 million for the nine-month period ended September 30, 2017, compared with the corresponding periods last year.

• Adjusted EBITDA rose 60% to $81.8 million in the third quarter and 32% to $218.7 million for the nine-month period ended September 30, 2017, compared with the corresponding periods last year.

• Innergex completed the acquisition of two wind projects (Plan Fleury and Les Renardières) with a total aggregate capacity of 43 MW in France's Champagne-Ardenne. The Plan Fleury facility was commissioned in September 2017 and the Les Renardières wind project is still under construction.

Establishment and Maintenance of DC&P and ICFR ...... Forward-Looking Information ..........................................

Non-IFRS Measures .......................................................

Additional Information and Updates ................................ Overview ........................................................................

Business Strategy ...........................................................

Third Quarter Update ......................................................

Development Project and Commissioning Activities........ Prospective Projects .......................................................

Operating Results ...........................................................

3 Liquidity and Capital Resources 20

3 Dividends 22

1. Financial Position 22

2. Free Cash Flow and Payout Ratio 25

1. Segment Information 26

2. Quarterly Financial Information 30

3. Investments in Joint Ventures 31

1. Non-wholly Owned Subsidiaries 33

2. Accounting Changes 36

13 Subsequent Events 37

The President and Chief Executive Officer and the Chief Financial Officer of the Corporation have designed, or caused to be designed, under their supervision:

• Disclosure controls and procedures ("DC&P") to provide reasonable assurance that: (i) material information relating to the Corporation is accumulated and communicated by others to the President and Chief Executive Officer and the Chief Financial Officer in a timely manner, particularly during the period in which the interim and annual filings are being prepared; and (ii) the information required to be disclosed by the Corporation in its annual filings, interim filings and other reports filed or submitted by it under applicable securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation.

• Internal control over financial reporting ("ICFR") to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS applicable to the Corporation.

In accordance with Regulation 52-109 - Certification of Disclosure in Issuers' Annual and Interim Filings, the President and Chief Executive Officer and the Chief Financial Officer of the Corporation have certified that: (a) there were no material weaknesses relating to the DC&P and ICFR for the three-month period ended September 30, 2017; (b) they have limited the scope of the Corporation's design of DC&P and ICFR to exclude the control policies and procedures of Montjean Energies, Theil Rabier Energies, Eoles-Yonne SAS, Energies du Plateau Central (Rougemont-1), Energies du Plateau Central 2 (Rougemont-2), Energie du Rechet (Vaite); Éole de Plan Fleury and Les Renardières; and (c) there was no change to the ICFR that has materially affected, or is reasonably likely to materially affect, the Corporation's ICFR during the three-month period ended September 30, 2017. The design and evaluation of the operating effectiveness of the DC&P and ICFR for the Montjean Energies, Theil Rabier Energies, Eoles-Yonne SAS, Energies du Plateau Central, Energies du Plateau Central 2, Energie du Rechet; Éole de Plan Fleury and Les Renardières will be completed in the 12 months following the dates of acquisition. A summary of the financial information about Montjean Energies, Theil Rabier Energies, Eoles-Yonne SAS, Energies du Plateau Central, Energies du Plateau Central 2, Energie du Rechet; Éole de Plan Fleury and Les Renardières is presented in the Non- wholly Owned Subsidiaries section of this MD&A.

To inform readers of the Corporation's future prospects, this MD&A contains forward-looking information within the meaning of applicable securities laws ("Forward-Looking Information"), including, but not limited to, statements relating to the anticipated completion of the Alterra Transaction and timing for such completion, sources and impact of funding of the Alterra Transaction, and strategic, operational and financial benefits and accretion expected to result from the Alterra Transaction, the Corporation and/or Alterra's power production, prospective projects, successful development, construction and financing of the projects under construction and the advanced-stage prospective projects, estimates of recoverable geothermal energy resources, business strategy, future development and growth prospects, business integration, governance, business outlook, objectives, plans and strategic priorities, and other statements that are not historical facts. Forward-Looking Information can generally be identified by the use of words such as "approximately", "may", "will", "could", "believes", "expects", "intends", "should", "plans", "potential", "project", "anticipates", "estimates", "scheduled" or "forecasts", or other comparable terminology that state that certain events will or will not occur. It represents the projections and expectations of the Corporation relating to future events or results as of the date of this MD&A.

are referred to in the Corporation's Annual Information Form in the "Risk Factors" section and include, without limitation: the ability of the Corporation to execute its strategy for building shareholder value; the risks associated with the renewable energy industry in general such as execution of strategy; ability to develop the Corporation's and Alterra's projects on time and within budget; the Corporation's ability to raise additional capital and the state of capital markets; liquidity risks related to derivative financial instruments ("Derivatives"); variability in hydrology, wind regimes and solar irradiation; delays and cost overruns in the design and construction of projects; the ability to secure new power purchase agreements or to renew any power purchase agreement on equivalent terms and conditions; health, safety and environmental risks; uncertainties surrounding the development of new facilities; obtainment of permits; performance of existing projects; equipment failure or unexpected operations and maintenance activity; interest rate fluctuations and refinancing risk; currency exchange rates; variation in merchant price of electricity; financial leverage and restrictive covenants governing current and future indebtedness; the possibility that the Corporation may not declare or pay a dividend; changes in governmental support to increase electricity to be generated from renewable sources by independent power producers; variability of installation performance and related penalties; the ability to attract new talent or to retain officers or key employees; litigation; performance of major counterparties; relationship with public utilities; social acceptance of renewable energy projects; relationships with stakeholders; equipment supply; the exposure to many different forms of taxation in various jurisdictions; changes in general economic conditions; regulatory and political risks; the ability to secure appropriate land; reliance on power purchase agreements; availability and reliability of transmission systems; foreign market growth and development risks; foreign exchange fluctuations; increases in water rental cost or changes to regulations applicable to water use; assessment of water, wind and sun resources and associated electricity production; dam failure; natural disasters and force majeure; cybersecurity; sufficiency of insurance coverage limits and exclusions; a credit rating that may not reflect the Corporation's actual performance or a lowering (downgrade) of the credit rating; potential undisclosed liabilities associated with acquisitions; integration of the facilities and projects acquired and to be acquired; failure to realize the anticipated benefits of acquisitions; reliance on shared transmission and interconnection infrastructure; and the fact that revenues from the Miller Creek facility will vary based on the spot price of electricity.

Although the Corporation believes that the expectations and assumptions on which Forward-Looking Information is based are reasonable under the current circumstances, readers are cautioned not to rely unduly on this Forward-Looking Information as no assurance can be given that it will prove to be correct. Forward-Looking Information contained herein is made as at the date of this MD&A and the Corporation does not undertake any obligation to update or revise any Forward-Looking Information, whether as a result of events or circumstances occurring after the date hereof, unless so required by law.

If the Alterra Transaction is not completed, and the Corporation and Alterra continue as separate entities, there are risks that the announcement of the Alterra Transaction and the dedication of substantial resources of the Corporation to the completion of the Alterra Transaction could have an impact on the Corporation's business and strategic relationships (including with future and prospective employees, customers, distributors, suppliers and partners), operating results and businesses generally, and could have a material adverse effect on the current and future operations, financial condition and prospects of the Corporation.

The Corporation is relying on certain assumptions that it believes are reasonable at this time, including assumptions as to the time required to prepare meeting materials for mailing, the timing of receipt of the shareholder, court, regulatory and other third- party approvals and the time necessary to satisfy the conditions to the closing of the Alterra Transaction. These dates may change for a number of reasons, including unforeseen delays in preparing meeting materials, inability to secure necessary regulatory or court approvals in a timely manner or the need for additional time to satisfy the conditions to the completion of the Alterra Transaction. Accordingly, readers should not place undue reliance on the forward-looking statements contained in this MD&A concerning these times.