ENBRIDGE INCOME FUND HOLDINGS INC.€¦ · ENBRIDGE INCOME FUND HOLDINGS INC. Special Meeting of...

ENBRIDGE INCOME FUND HOLDINGS INC.

Special Meeting of the Shareholders

to be held on October 17, 2011

in Calgary, Alberta

NOTICE OF SPECIAL MEETING and

MANAGEMENT INFORMATION CIRCULAR

September 13, 2011

September 13, 2011

Dear Shareholders:

You are invited to attend a special meeting (the “Meeting”) of the holders (“Shareholders”) of common shares (“Common Shares”) of Enbridge Income Fund Holdings Inc. (the “Corporation”) to be held in the Strand/Tivoli Room of the Metropolitan Conference Centre, 333 – 4th Avenue S.W., Calgary, Alberta at 1:00 p.m. on October 17, 2011 for the purpose of considering, and if deemed advisable, approving the acquisition by indirect wholly-owned subsidiaries of Enbridge Income Fund (the “Fund”) of interests in entities that own certain renewable assets presently owned by indirect wholly-owned subsidiaries of Enbridge Inc. (“Enbridge”).

The acquisition involves a number of steps and will be funded in part by the issuance of securities by the Corporation, the Fund and Enbridge Commercial Trust and the borrowing of funds from Enbridge (the “Transaction”). Completion is subject to certain conditions, including regulatory and third party approvals, and completion of an offering of subscription receipts for aggregate gross proceeds of $219.5 million, which will be used by the Corporation to subscribe for additional ordinary units of the Fund.

Please refer to the accompanying Management Information Circular (“Circular”) for a more detailed description of the Transaction, including information about the renewable assets the Fund is proposing to acquire, the terms and conditions of the purchase, subscription and purchase for cancellation agreement and the risk factors relating to the completion of the Transaction.

The Transaction has been reviewed by a joint committee (the “Special Committee”) of independent trustees of Enbridge Commercial Trust and independent directors of the Corporation, with the assistance and guidance of independent engineering, legal, tax and financial advisors. Following a recommendation by the Special Committee, the board of directors of the Corporation (with directors who are directors or officers of Enbridge abstaining) has concluded that the Transaction is in the best interests of the Corporation, the Fund and Enbridge Commercial Trust and is fair to the Corporation, and recommends that Shareholders vote in favour of the ordinary resolution approving the Transaction. Completion of the Transaction is expected to provide the following benefits to the Fund, the Corporation and Shareholders:

incremental earnings and cash flow from energy infrastructure with a reliable, low risk business model;

increased scale and diversification of the Fund’s underlying business; and enhanced trading liquidity and better access to capital.

As the Transaction is being conducted by the Corporation with a related party, it must be approved by a majority of Shareholders, excluding Enbridge and its affiliates. Please give the Circular your careful consideration and, if you require assistance, consult your financial, tax or other professional advisors.

You are encouraged to vote. Enclosed with this letter is the Notice of Meeting and Circular and a form of proxy or voting instruction form. Please complete and deliver your form of proxy or voting instruction form prior to 1:00 p.m. on October 13, 2011, to ensure your representation at the Meeting.

Yours truly,

(signed) “John Whelen”

John Whelen, President

TABLE OF CONTENTSPage

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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS.........................................................................................1

SUMMARY.............................................................................................................................................................2

GLOSSARY OF TERMS.........................................................................................................................................4

ABBREVIATIONS ..................................................................................................................................................9

INFORMATION CONTAINED IN CIRCULAR ........................................................................................................10Forward Looking Statements ............................................................................................................................10Non-GAAP Measures .......................................................................................................................................11Information Incorporated by Reference..............................................................................................................12Currency ..........................................................................................................................................................12

GENERAL INFORMATION FOR THE MEETING...................................................................................................12Solicitation of Proxies .......................................................................................................................................12Appointment and Revocation of Proxies ............................................................................................................12Advice to Beneficial Holders of Common Shares ...............................................................................................13Voting of Proxies ..............................................................................................................................................13

VOTING SHARES AND PRINCIPAL HOLDERS ...................................................................................................14

MATTERS TO BE ACTED UPON AT THE MEETING............................................................................................14The Transaction ...............................................................................................................................................14The PSPCA......................................................................................................................................................16The Financing ..................................................................................................................................................18Closing of the Transaction ................................................................................................................................19Pre-emptive Rights...........................................................................................................................................19ECT Trust Indenture .........................................................................................................................................19Description of the Renewable Assets ................................................................................................................19Operations and Results of Renewable Entities ..................................................................................................26Summary Financial Information for the Renewable Entities ................................................................................27Summary Pro Forma Financial Information........................................................................................................27Renewable Energy Industry Overview...............................................................................................................28Background to the Transaction..........................................................................................................................31SAIC Report.....................................................................................................................................................32Valuation and Fairness Opinion ........................................................................................................................35Prior Valuations................................................................................................................................................35Benefits of the Transaction ...............................................................................................................................35Effect of Transaction on Shareholders...............................................................................................................36Recommendation of the Joint Special Committee and the Board........................................................................36Approval of the Transaction ..............................................................................................................................37

POST CLOSING MATTERS .................................................................................................................................38Corporate Structure ..........................................................................................................................................38Management ....................................................................................................................................................39Repayment of Fund Indebtedness.....................................................................................................................40Expenses of the Transaction.............................................................................................................................40

RISK FACTORS...................................................................................................................................................40Risks Related to Completion of Transaction ......................................................................................................40Risks Relating to the Business of the Renewable Assets ...................................................................................41

INTEREST OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON ................................44

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS ..............................................................44

EXPERTS.............................................................................................................................................................45

OTHER BUSINESS ..............................................................................................................................................45

ADDITIONAL INFORMATION...............................................................................................................................45

APPROVAL..........................................................................................................................................................46

APPENDIX A CIBC VALUATION AND FAIRNESS OPINION.............................................................................. A-1

APPENDIX B CONSENTS OF EXPERTS ........................................................................................................... B-1

APPENDIX C FINANCIAL STATEMENTS .......................................................................................................... C-1

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ENBRIDGE INCOME FUND HOLDINGS INC.

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN that a special meeting (the “Meeting”) of the holders (“Shareholders”) of common shares (“Common Shares”) of Enbridge Income Fund Holdings Inc. (the “Corporation”) will be held on October 17, 2011 at 1:00 p.m. (Calgary time) in the Strand/Tivoli Room of the MetropolitanConference Centre, 333 – 4th Avenue S.W., Calgary, Alberta for the purposes of:

1. considering, and if thought fit, passing with or without variation, an ordinary resolution approving the acquisition by indirect wholly-owned subsidiaries of Enbridge Income Fund (the “Fund”) of interests in entities that own certain renewable assets currently owned either directly by Enbridge Inc. (“Enbridge”) or indirectly by wholly-owned subsidiaries of Enbridge, pursuant to a Purchase, Subscription and Purchase for Cancellation Agreement dated September 8, 2011 (the “Agreement”) and completion of all of the transactions contemplated by the Agreement and necessary or advisable in connection therewith including the subscription and purchase by the Corporation of ordinary trustunits of the Fund and the issuance and sale by the Corporation of Common Shares to Enbridge, all as described in more detail in the Management Information Circular (the “Circular”) dated September 13, 2011; and

2. transacting such other business that may properly come before the Meeting or any adjournment thereof.

This Notice of Meeting is accompanied by the Circular and a voting instruction form or a form of proxy (as applicable). Shareholders are referred to the Circular for more detailed information regarding the matters to be considered at the Meeting.

The directors of the Corporation have fixed September 16, 2011 as the record date. Shareholders of record at the close of business on September 16, 2011 are entitled to notice of the Meeting and to vote thereat or at any adjournment thereof, except to the extent that a person has transferred any Common Shares after that date and the new holder of such Common Shares establishes proper ownership and requests, not later than 10 days before the Meeting, to be included on the list of Shareholders eligible to vote at the Meeting.

In order to be valid and acted upon at the Meeting, proxies must be received by the Corporation, c/o CIBC Mellon Trust Company, the Registrar and Transfer Agent of the Corporation, at P.O. Box 721, Agincourt, Ontario, M1S 0A1, Attention: Proxy Department, not later than 1:00 p.m. (Toronto time) on October 13, 2011, or if the Meeting is adjourned, not later than 48 hours, excluding Saturdays, Sundays and statutory holidays in the Province of Ontario, prior to the time of the adjourned Meeting.

If you are a non-registered holder of Common Shares and receive these materials through a broker or through another intermediary, you must complete, sign and return the voting instruction form in accordance with the instructions provided by such broker or other intermediary.

DATED at Calgary, Alberta, this 13th day of September, 2011.

BY ORDER OF THE BOARD OF DIRECTORS

(signed) “Debra J. Poon”

Debra J. PoonCorporate SecretaryEnbridge Management Services Inc., as Manager of the Corporation

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SUMMARY

The following is a summary of certain information contained elsewhere in this Circular. This Summary is qualified in its entirety by the more detailed information appearing elsewhere in this Circular, including the Appendices hereto. It is recommended that Shareholders read this Circular and consult with their own legal, tax, financial and other professional advisors with respect to the matters to be acted on at the Meeting. Capitalized terms used but not otherwise defined in this Summary have the meanings set forth under the heading “Glossary of Terms”.

The Meeting

Time, Date and Place of Meeting

The Meeting will be held on October 17, 2011 at 1:00 p.m. (Calgary time) in the Strand/Tivoli Room of the Metropolitan Conference Centre, 333 – 4th Avenue S.W., Calgary, Alberta.

Purpose of the Meeting

The purpose of the Meeting is to consider, and if deemed advisable, pass a resolution approving the acquisition by indirect wholly-owned subsidiaries of the Fund of interests in entities that own the Renewable Assets and the transactions contemplated thereby.

Required Approval

Pursuant to MI 61-101, certain of the steps contemplated in the Transaction, including the subscription and purchase of the Fund Units by the Corporation and the issuance of Common Shares to Enbridge, constitute “related party transactions”. As such, the Corporation cannot proceed with the Transaction until it has received the approval of a majority of the Disinterested Shareholders. See “Matters to be Acted Upon at the Meeting – Approval of the Transaction”.

The Transaction

The Transaction involves the acquisition by indirect wholly-owned subsidiaries of the Fund of interests in entities that own the Renewable Assets for an aggregate price of $1.23 billion, subject to adjustment. See “Matters to be Acted Upon at the Meeting – The Transaction”.

The PSPCA

The PSPCA provides that completion of the Transaction is subject to a number of conditions either being satisfied or waived, including without limitation, completion of the Financing and the Enbridge Financing, Disinterested Shareholder approval and TSX approval. The PSPCA also contains certain customary representations and warranties of the parties to the PSPCA as well as certain customary negative and positive covenants. Closing of the Transaction will occur upon satisfaction or waiver of all of the conditions precedent to completion of the Transaction and is expected to occur as soon as practicable following receipt of Disinterested Shareholder approval. See “Matters to be Acted Upon at the Meeting – The PSPCA”.

The Financing

The Transaction will be funded in part by the Financing, being a public offering of an aggregate of 11,707,000 Subscription Receipts at a price of $18.75 per Subscription Receipt for aggregate gross proceeds of $219.5 million. Each Subscription Receipt will be automatically exchanged for one Common Share without payment of additional consideration immediately prior to the closing of the Transaction.

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The escrowed funds will be held by an escrow agent, pending the closing of the Transaction. Provided that the Transaction closes on or before December 31, 2011, the escrowed funds, together with interest thereon, will be released to the Corporation immediately prior to the closing of the Transaction. See “Matters to be Acted Upon at the Meeting – The Financing”.

Acquisition Rationale

The acquisition of the Renewable Assets is consistent with the Fund’s investment objectives and strategy of acquiring assets which will provide investors with a high payout of cash and a high degree of reliability of income, with relatively low risk and modest growth. Completion of the Transaction is expected to provide the following benefits to the Fund, the Corporation and the Shareholders:

incremental earnings and cash flow from energy infrastructure with a reliable, low risk business model;

increased scale and diversification of the Fund’s underlying business; and

enhanced trading liquidity and better access to capital.

See “Matters to be Acted Upon at the Meeting – Benefits of the Transaction”.

Recommendation of the Joint Special Committee and the Board

The Special Committee concluded that the Transaction is in the best interests of the Corporation, the Fund and ECT and is fair to the Corporation. Accordingly, the Special Committee unanimously recommended to the Board that it approve the Transaction and recommend approval of the Transaction by the Shareholders.

The Board unanimously (with directors who are directors or officers of Enbridge abstaining) concluded that the Transaction is in the best interests of the Corporation and is fair to the Corporation, resolved to approve the Transaction and the PSPCA and recommends the approval of the Transaction by Disinterested Shareholders.

Valuation and Fairness Opinion

The Special Committee retained the Financial Advisor to provide financial advice and related assistance to the Special Committee in evaluating the Transaction, including the preparation and delivery to the Special Committee of a valuation of the Renewable Assets in accordance with the requirements of MI 61-101.

The Financial Advisor delivered the verbal Valuation and Fairness Opinion to the Special Committee on September 8, 2011, which Valuation and Fairness Opinion was subsequently confirmed in writing. Based on and subject to the analyses, assumptions, limitations and qualifications contained in the Valuation and Fairness Opinion, the Financial Advisor concluded that, as of September 8, 2011, the range of values representing the fair market value of the Renewable Assets is between $1.1 billion and $1.25 billion and that the consideration payable by ECT for the Renewable Assets pursuant to the PSPCA is fair, from a financial point of view, to ECT and the Corporation. See “Matters to be Acted upon at the Meeting - Valuation and Fairness Opinion”.

Form of Resolution

Disinterested Shareholders will be asked to consider and, if deemed advisable, approve the form of resolution set out under the heading “Matters to be Acted upon at the Meeting – Approval of the Transaction – Form of Resolution”. It is the intention of the persons named in the enclosed form of proxy, unless expressly directed to the contrary in such form of proxy, to vote in favour of such resolution.

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GLOSSARY OF TERMS

“ABCA” means the Business Corporations Act (Alberta), together with any amendments thereto, including regulations promulgated thereunder;

“AIF” means the Annual Information Form of the Corporation dated February 1, 2011;

“ASPE” means in accordance with Part II – Accounting Standards for Private Enterprises of the Canadian Institute of Chartered Accountants Handbook;

“Board” means the board of directors of the Corporation;

“Circular” means this management information circular of the Corporation dated September 13, 2011, together with all appendices hereto and documents incorporated by reference herein;

“CGAAP” means in accordance with Part V – Pre-changeover accounting standards of the Canadian Institute of Chartered Accountants Handbook, the accounting principles applied by the Fund and Enbridge in their financial reporting;

“Common Shares” means the common shares in the capital of the Corporation;

“Corporation” means Enbridge Income Fund Holdings Inc., a corporation incorporated under the ABCA;

“CPI” means the Consumer Price Index published from time to time by Statistics Canada;

“Cruickshank Contribution Agreement” means the renewable power repayable contribution agreement between Her Majesty the Queen in Right of Canada as represented by the Minister of Natural Resources and CWFL dated March 13, 2009;

“Cruickshank RESOP Agreement” means the RESOP contract between CWFL and the OPA dated February 1, 2007, assigned to ERIP on August 5, 2011;

“Cruickshank Wind Farm” means the 8.25 MW wind power farm consisting of five Vestas V82 1.65 MW wind turbines and associated infrastructure located near the shores of Lake Huron in Bruce County, Ontario;

“CWFL” means Cruickshank Wind Farm Ltd.;

“Directive” means the supply mix directive dated June 13, 2006 issued by the Ontario Minister of Energy, as amended;

“Directors” means the directors of the Corporation;

“Disinterested Shareholders” means the Shareholders, excluding Enbridge, a Related Party of Enbridge and any Joint Actor of Enbridge or of a Related Party of Enbridge;

“DNV” means DNV Renewables (USA) Inc.;

“ecoEnergy Program” means a funding program of the Government of Canada to encourage the generation of electricity from renewable energy sources;

“ECT” means Enbridge Commercial Trust, an unincorporated trust established under the laws of Alberta pursuant to the ECT Trust Indenture;

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“ECT Board” means the board of the ECT Trustees;

“ECT Common Units” means the class of trust units of ECT designated as common units in the ECT Trust Indenture and having the rights, privileges, restrictions and conditions described therein;

“ECT Preferred Units” means the class of trust units of ECT designated as preferred units in the ECT Trust Indenture and having the rights, privileges, restrictions and conditions described therein;

“ECT Trust Indenture” means the trust indenture pursuant to which ECT was established, made as of December 20, 2002 and last amended and restated on December 17, 2010;

“ECT Trustees” means the trustees of ECT which for greater certainty, is comprised of the Independent ECT Trustees and Manager Trustees;

“EIPGP” means Enbridge Income Partners GP Inc., the general partner of EIPLP, which is wholly-owned by ECT;

“EIPHI” means Enbridge Income Partners Holdings Inc., which is wholly-owned by EIPLP;

“EIPLP” means Enbridge Income Partners LP, which is directly and indirectly wholly-owned by ECT;

“EMSI Services Agreement” means an intercorporate service agreement to be entered into among the Manager, Enbridge and the Services Recipients in respect of the management of the Renewable Assets;

“Enbridge” means Enbridge Inc., a corporation continued under the laws of Canada and if the context requires, includes direct or indirect Subsidiaries of Enbridge;

“Enbridge Financing” means, collectively, (i) the granting by Enbridge of a loan in the aggregate principal amount of $655 million to the Fund pursuant to a 10 year subordinated promissory note; (ii) the subscription by Enbridge, and the issuance by the Corporation, of 2,909,000 Common Shares to permit Enbridge to maintain its 19.9% interest in the Corporation; and (iii) the subscription by Enbridge, and the issuance by ECT, of 16,051,000 ECT Preferred Units for an aggregate subscription price of $301 million;

“EPC Agreement” means an engineering, procurement and construction agreement;

“EPI” means Enbridge Pipelines Inc., which is indirectly wholly-owned by Enbridge;

“ERIC” means Enbridge Renewable Energy Infrastructure Canada Inc., formerly known as 6463002 Canada Inc., which is the general partner of ERIP and wholly-owned by Enbridge;

“ERIP” means Enbridge Renewable Energy Infrastructure Limited Partnership, formerly known as Enbridge Ontario Wind Power LP, which is indirectly wholly-owned by Enbridge;

“ERPI” means the ecoEnergy for Renewable Power Incentive provided for under the ecoEnergy Program payable pursuant to the Sarnia Contribution Agreements, the Kincardine Contribution Agreement and the Cruickshank Contribution Agreement;

“Financial Advisor” means CIBC World Markets Inc.;

“Financing” means the public offering of Subscription Receipts for gross proceeds of $219.5 million, which will be used by the Corporation to purchase additional Fund Units;

“First Solar” means First Solar Development (Canada) Inc.;

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“FIT Program” means the feed-in-tariff program of the OPA enabled by the Green Energy and Green Economy Act, 1999 (Ontario);

“Fund” means Enbridge Income Fund, an unincorporated trust established under the laws of Alberta pursuant to the Fund Trust Indenture;

“Fund AIF” means the Annual Information Form of the Fund dated February 1, 2011;

“Fund Trust Indenture” means the trust indenture pursuant to which the Fund was established, made as of May 22, 2003 and last amended and restated on December 17, 2010;

“Fund Units” means the class of trust units of the Fund designated as ordinary units in the Fund Trust Indenture and having the rights, privileges, restrictions and conditions described therein;

“GAAP” means generally accepted accounting principles in Canada, as in effect from time to time;

“GDP” means gross domestic product;

“GHG” means greenhouse gases that may trap heat in the earth’s atmosphere, including carbon dioxide, methane, nitrous oxide and other gases;

“Hourly Ontario Energy Price” means the price provided under the IESO Market Rules;

“IESO” means the Independent Electricity System Operator of Ontario, established under the Electricity Act, 1988 (Ontario), or its successor;

“IESO Market Rules” means the rules made under the Electricity Act, 1988 (Ontario), together with all market manuals, policies and guidelines issued by the IESO;

“Independent Directors” means the Directors who are independent (as such term is defined in National Instrument 58-101 Disclosure of Corporate Governance Practices) of the Manager and any of its affiliates;

“Independent ECT Trustees” means the ECT Trustees who are independent (as such term is defined in National Instrument 58-101 Disclosure of Corporate Governance Practices) of the Manager and any of its affiliates;

“Joint Actor” has the meaning ascribed to such term in MI 61-101;

“Kincardine Contribution Agreement” means the renewable power repayable contribution agreement between ERIP and Her Majesty the Queen in Right of Canada as represented by the Minister of Natural Resources dated March 13, 2009, as amended;

“Kincardine PPA” means the consolidated and restated renewable energy supply II contract made under the Ontario Renewable Energy Supply II Program between ERIP and the OPA dated December 15, 2008;

“Kincardine Wind Farm” means the 181.5 MW wind power farm consisting of 110 Vestas V82 1.65 MW wind turbines and associated infrastructure located near the shores of Lake Huron in Bruce County, Ontario;

“Management Agreement” means the management and administrative services agreement between the Corporation and the Manager dated December 17, 2010;

“Manager” means Enbridge Management Services Inc., a corporation incorporated under the ABCA and a wholly-owned subsidiary of Enbridge, which is the manager of the Corporation pursuant to the Management Agreement;

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“Manager Trustees” means the ECT Trustees appointed by the Manager;

“Meeting” means the special meeting of the Shareholders to be held at 1:00 p.m. (Calgary time) on Monday, October 17, 2011 in the Strand/Tivoli Room of the Metropolitan Conference Centre, 333 – 4th Avenue S.W.,Calgary, Alberta and any adjournments thereof to consider, among other things, the Transaction;

“MI 61-101” means Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions of the OSC and Autorité des marchés financiers, as amended or replaced;

“Notice of Meeting” means the notice regarding the Meeting accompanying this Circular;

“1682399” means 1682399 Ontario Corp. which is wholly-owned by Enbridge;

“OEB” means the Ontario Energy Board;

“O&M Contract” means an operations and maintenance agreement;

“ON Farms” means Ontario Sustainable Farms Inc., which is wholly-owned by ERIP;

“Ontario Wind Project” means, collectively, the Kincardine Wind Farm and the Cruickshank Wind Farm;

“OPA” means the Ontario Power Authority;

“OSC” means the Ontario Securities Commission;

“PPA” means an electrical power purchase agreement which provides for the supply and purchase of electric power;

“PSPCA” means the purchase, subscription and purchase for cancellation agreement among Enbridge, Talbot LP, ERIP and EPI, on the one hand, and EIPLP, Sask, Westspur, Weyburn and EIPHI, on the other hand, dated September 8, 2011;

“Related Party” has the meaning ascribed to such term in MI 61-101;

“Renewable Assets” means the Sarnia Solar Project, the Talbot Wind Project and the Ontario Wind Project;

“Renewable Entities” means Talbot GP, Talbot LP, 1682399, ERIC, ERIP and ON Farms;

“Resolution” means the ordinary resolution to be considered by the Disinterested Shareholders at the Meeting the text of which is set forth under the heading “Approval of the Transaction – Form of Resolution”;

“RES” means Renewable Energy Systems Canada Inc.;

“RES Management Agreement” means the management, operations, maintenance and administration agreement between Talbot LP and RES Wind dated November 18, 2009, as amended;

“RES Wind” means Res Canada Wind Operations LP;

“RESOP” means the Renewable Energy Standard Offer Program of the Government of Ontario;

“RPS” means Renewable Portfolio Standards;

“SAIC” means SAIC Energy, Environment & Infrastructure, LLC;

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“SAIC Report” means the report entitled “Independent Engineer’s Report - Enbridge Renewable Assets” dated September 13, 2011 prepared by SAIC and DNV for the Corporation and ECT under the direction of the Special Committee;

“Sarnia Contribution Agreements” means collectively, the eight renewable power repayable contribution agreements between Her Majesty the Queen in Right of Canada as represented by the Minister of Natural Resources and ERIP entered into in 2010, as amended;

“Sarnia Operating Agreement” means the operating and maintenance services agreement between First Solar and ERIP dated October 1, 2009, as amended;

“Sarnia RESOP Agreements” means collectively, the eight RESOP contracts between First Solar and the OPA entered into in 2007, as amended and assigned to ERIP, providing for the supply and purchase of electric power under the RESOP;

“Sarnia Solar Project” means the 80 MW solar project located in Sarnia, Ontario;

“Sask” means Enbridge Pipelines (Saskatchewan) Inc., which is wholly-owned by EIPLP;

“Saskatchewan System” means the crude oil and liquids pipeline system comprised of the Saskatchewan gathering system, the Westspur system, the Weyburn system and the Virden system which collectively comprise approximately 388 km of trunk line and 1,900 km of gathering system pipeline and related terminals and storage facilities;

“SCL” means Siemens Canada Limited;

“Service Agreement” means the service, maintenance and warranty agreement between Talbot LP and SCL, dated November 14, 2009, as amended;

“Services Recipients” means ERIC and Talbot GP;

“Shareholder” means a holder of Common Shares;

“SMA” means the services and maintenance agreement between ERIP and Vestas entered into as of June 18, 2011;

“Special Committee” means the joint special committee of the Independent ECT Trustees and Independent Directors formed to consider the Transaction;

“Subscription Receipts” means the subscription receipts to be issued by the Corporation pursuant to the Financing;

“Subsidiary” has the meaning ascribed to such term in the ABCA, with such modifications as necessary so that the definition also applies to entities that are not a corporation and for greater certainty, includes any general partnership, limited partnership, joint venture, trust, limited liability company, unlimited liability company or other entity, whether or not having legal status, that would constitute a subsidiary if such entity were a corporation;

“Talbot Contribution Agreement” means the renewable power repayable contribution agreement between Talbot LP and Her Majesty the Queen in Right of Canada as represented by the Minister of Natural Resources dated August 13, 2009;

“Talbot GP” means Talbot Windfarm GP Inc., the general partner of Talbot LP, which is wholly-owned by Enbridge;

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“Talbot LP” means Talbot Windfarm, LP;

“Talbot PPA” means the renewable energy supply III contract made under the Ontario Renewable Energy Supply III Program between RES and the OPA dated January 14, 2009, as amended and assigned to Talbot LP on October 23, 2009;

“Talbot Wind Project” means the 98.9 MW wind power project consisting of 43 Siemens 2.3 MW wind turbines and associated infrastructure located near the shores of Lake Erie near Chattam, Ontario;

“Tax Act” means the Income Tax Act (Canada), as amended, including the regulations promulgated thereunder, as amended;

“Transaction” means the proposed acquisition by indirect wholly-owned Subsidiaries of the Fund from indirect wholly-owned Subsidiaries of Enbridge of interests in entities that own the Renewable Assets and related transactions as described in “Matters to be Acted Upon at the Meeting – The Transaction”;

“TSX” means the Toronto Stock Exchange;

“Underwriters” means RBC Dominion Securities Inc. (as lead underwriter), Scotia Capital Inc., TD Securities Inc., BMO Nesbitt Burns Inc., CIBC World Markets Inc., HSBC Securities (Canada) Inc., National Bank Financial Inc., Canaccord Genuity Corp. and FirstEnergy Capital Corp.;

“Valuation and Fairness Opinion” means the valuation and fairness opinion dated September 8, 2011 prepared by the Financial Advisor;

“Vestas” means Vestas-Canadian Wind Technology, Inc.;

“Virden” means Enbridge Pipelines (Virden) Inc., which is wholly-owned by Sask;

“Westspur” means Enbridge Pipelines (Westspur) Inc., which is wholly-owned by Sask; and

“Weyburn” means Enbridge Pipelines (Weyburn) Inc., which is wholly-owned by Sask.

ABBREVIATIONS

CO2e - carbon dioxide equivalent MW - megawattGHG - greenhouse gas MWh - megawatt-hourm2 - square metre PV - photovoltaickm - kilometre SBG - surplus baseload generationKW - kilowatt TWh - terawatt-hour

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ENBRIDGE INCOME FUND HOLDINGS INC.MANAGEMENT INFORMATION CIRCULAR

INFORMATION CONTAINED IN CIRCULAR

This Circular dated September 13, 2011 is furnished in connection with the solicitation by Management of the Corporation of proxies from Shareholders for use at the Meeting for the purposes set out in the accompanying Notice of the Meeting. No person has been authorized to give any information or make any representation in connection with the Transaction or any other matters to be considered at the Meeting other than those statements and representations contained in this Circular. Information in this Circular is given as of September 13, 2011 unless otherwise stated. Except as expressly contained in the SAIC Report, the information contained in this Circular regarding the Renewable Assets has been provided by Enbridge, which indirectly owns all of the Renewable Assets. The Corporation does not assume responsibility for the accuracy or completeness of such information. Shareholders should not construe the contents of this Circular as legal, tax or financial advice and should consult with their own professional advisors as to the relevant legal, tax, financial or other matters in connection herewith.

Capitalized terms used in this Circular and not otherwise defined have the meanings set forth under the heading “Glossary of Terms”.

Forward Looking Statements

Certain information provided in this Circular constitutes forward looking statements or information (collectively, “forward looking statements”). This information, which includes information relating to the Renewable Assets, the Transaction, the future plans and operations of the Fund, its Subsidiaries and of the Corporation, is provided to Shareholders in order that they can make an informed decision regarding the Resolution and may not be appropriate for other purposes. Forward looking statements are typically identified by words such as “anticipate”, “expect”, “project”, “estimate”, “forecast”, “plan”, “intend”, “target”, “believe”, “likely” and similar words suggesting future outcomes or statements regarding an outlook or that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. In particular, forward looking statements in this Circular and the documents incorporated by reference herein include, but are not limited to, expectations regarding:

the Renewable Assets and the Transaction; including without limitation regarding satisfaction of conditions, receipt of approvals required to complete the Transaction, completion of the Transaction; equity and debt financings required to complete the Transaction and the effect, outcome, results and perceived benefits of the Transaction;

wind and solar resources;

performance of the Renewable Assets, including availability, capacity and cash flows;

operations, maintenance and replacement timing and costs;

government incentives, rebates, regulations and curtailment;

recovery of capital costs of assets;

cash available for distribution by ECT and the Fund assuming completion of the Transaction; and

future distributions to the Corporation by the Fund and future dividends to Shareholders assuming completion of the Transaction.

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Although the Corporation believes that these forward looking statements are reasonable based on the information available on the date such statements are made and processes used to prepare the information, such statements are not guarantees of future performance and readers are cautioned against placing undue reliance on forward looking statements. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties and other factors, which may cause actual results, performance, levels of activity and achievements to differ materially from those expressed or implied by such statements. Material assumptions include assumptions regarding: the timely receipt of required regulatory approvals; expected supply and demand for energy; expected exchange rates; inflation; interest rates; availability and price of labour and materials; operational reliability; customer project approvals; maintenance of support and regulatory approvals for the Fund’s projects; anticipated in service dates and weather.

Assumptions regarding the expected supply and demand for energy, and the prices therefor, are material to and underlay all forward looking statements. These factors are relevant to all forward looking statements as they may impact current and future levels of demand for the Fund’s services. Similarly, exchange rates, inflation and interest rates impact the economies and business environments in which the Fund operates, may impact levels of demand for the Fund’s services and cost of inputs, and are therefore inherent in all forward looking statements. Due to the interdependencies and correlation of these macroeconomic factors, the impact of any one assumption on a forward looking statement cannot be determined with certainty, particularly with respect to expected earnings and associated per unit or share amounts, or estimated future distributions or dividends.

Forward looking statements of the Corporation and the Fund are subject to risks and uncertainties pertaining to operating performance, regulatory parameters, project approval and support, weather, economic and competitive conditions, exchange rates, interest rates, tax rates and commodity prices, including but not limited to those risks and uncertainties discussed in this Circular and in the other filings made by the Corporation and the Fund with Canadian securities regulators. The impact of any one risk, uncertainty or factor on a particular forward looking statement is not determinable with certainty as these are interdependent and the Fund’s future course of action depends on Management’s assessment of all information available at the relevant time.

Further, certain forward looking statements regarding the Renewable Assets and effect of the Transaction on the Fund and the Corporation, are derived from information provided by Enbridge which the Corporation has not independently verified. The Corporation has no reason to believe that such forward looking statements are inaccurate and assumes no responsibility for such forward looking statements. Except to the extent required by law, the Corporation assumes no obligation to publicly update or revise any forward looking statements made in this Circular or otherwise, whether as a result of new information, future events or otherwise. All subsequent forward looking statements, whether written or oral, attributable to the Corporation or persons acting on the Corporation’s behalf, are expressly qualified in their entirety by these cautionary statements.

Non-GAAP Measures

This Circular contains references to cash available for distribution. Cash available for distribution represents cash available to finance distributions on Fund Units and ECT Preferred Units as well as for debt repayments and reserves. Cash available for distribution consists of operating cash flow from the Fund’s underlying businesses less deductions for maintenance capital expenditures, the Fund’s administrative and operating expenses, corporate segment interest expense, applicable taxes and other reserves determined by the Manager. This measure is important to Shareholders as the Corporation’s objective is to provide a predictable flow of dividends to Shareholders and the Corporation’s cash flows are derived from its investment in the Fund. Cash available for distribution is not a measure that has a standardized meaning prescribed by CGAAP and is not considered a GAAP measure. Therefore, this measure may not be comparable with similar measures presented by other issuers.

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Information Incorporated by Reference

The following documents, filed with the securities commission or similar authority in each of the Provinces of Canada and which may be viewed at www.sedar.com, are specifically incorporated by reference in, and form an integral part of, this Circular provided that such documents are not incorporated by reference to the extent that their contents are modified or superseded by a statement contained in this Circular or in any other subsequently filed document that is also incorporated by reference in this Circular:

1. information under the heading “Executive Compensation - Management Contract” at pages 6 and 7 of the Management Information Circular of the Corporation dated March 9, 2011 and the information incorporated by reference under such heading; and

2. information under the heading “Risk Factors” at pages 8 to 10 of the AIF.

Currency

All references to dollars or “$” are to Canadian dollars unless otherwise indicated.

GENERAL INFORMATION FOR THE MEETING

Solicitation of Proxies

Solicitation of proxies will be primarily by mail but may also be by telephone, facsimile, electronic mail or oral communication by the Directors and by officers of the Manager. The cost of such solicitation will be borne by the Corporation and reimbursed by ECT.

This Circular does not constitute the solicitation of a proxy by any person in any jurisdiction in which such a solicitation is not authorized or in which the person making such solicitation is not qualified to do so or to any person to whom it is unlawful to make such a solicitation.

Appointment and Revocation of Proxies

Each of the persons named in the accompanying form of proxy or voting instruction form is a Director and an executive officer of the Corporation. A Shareholder who wishes to appoint some other person (who is not required to be a Shareholder) as his or her representative at the Meeting may do so either by inserting such person’s name in the blank space provided in the form of proxy and deleting the names printed thereon or by completing a proper proxy. Such Shareholder should notify the nominee of his or her appointment and instruct the nominee on how the Shareholder’s Common Shares are to be voted.

A proxy will not be valid for the Meeting or any adjournment thereof unless it is signed by the Shareholder or by the Shareholder’s attorney authorized in writing or, if the Shareholder is a corporation, it must be executed under corporate seal or by a duly authorized officer or attorney of the corporation and delivered to the Corporation, c/o CIBC Mellon Trust Company, the Registrar and Transfer Agent of the Corporation, at P.O. Box 721, Agincourt, Ontario, M1S 0A1, Attention: Proxy Department, not later than 1:00 p.m. (Toronto time) on October 13, 2011, or if the Meeting is adjourned, not later than 48 hours, excluding Saturdays, Sundays and statutory holidays in the Province of Ontario, prior to the time of the adjourned Meeting.

A Shareholder who has given a proxy may revoke it, in any manner permitted by law, including by instrument in writing, executed by the Shareholder or by his attorney authorized in writing or, if the Shareholder is a corporation, executed by a duly authorized officer or attorney of such corporation and deposited with CIBC Mellon Trust Company, at the address specified above at any time up to and including the last business day preceding the day of the Meeting or any adjournment thereof, or with the Chair of the Meeting on the day of the Meeting or any adjournment thereof.

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Advice to Beneficial Holders of Common Shares

The information set forth in this section is of significant importance to many Shareholders, as a substantial number of Shareholders do not hold Common Shares in their own name. Shareholders who do not hold Common Shares in their own name (“Beneficial Shareholders”) should note that only proxies deposited by Shareholders whose names appear on the records of the Corporation as the registered holder of Common Shares can be recognized and acted upon at the Meeting. If Common Shares are listed in an account statement provided to a Beneficial Shareholder by a broker, then in almost all cases those Common Shares will not be registered in the Shareholder’s name on the records of the Corporation. Such Common Shares will more likely be registered under the name of the Shareholder’s broker or an agent of that broker. In Canada, the majority of Common Shares are registered under the name of CDS & Co. (the registration name for CDS Clearing and Depository Services Inc., which acts as nominee for many Canadian brokerage firms). Common Shares held by brokers or their agents or nominees can only be voted upon the instructions of the Beneficial Shareholder. Without specific instructions, brokers and other intermediaries are prohibited from voting Common Shares for their clients. Therefore, Beneficial Shareholders should ensure that the instructions regarding the voting of their Common Shares are communicated to the appropriate person on a timely basis.

Applicable regulatory policy in Canada requires brokers and other intermediaries to seek voting instructions from Beneficial Shareholders in advance of Shareholder meetings. Each broker or other intermediary has its own mailing procedures and provides its own return instructions to clients, which should be carefully followed by Beneficial Shareholders in order to ensure that their Common Shares are voted at the Meeting. In some cases, the voting instruction form provided to Beneficial Shareholders by their broker or other intermediary is very similar, even identical, to the form of proxy provided to registered Shareholders. However, its purpose is limited to instructing the registered Shareholder (the broker or other intermediary, or an agent thereof) on how to vote on behalf of the Beneficial Shareholder. Most brokers now delegate responsibility for obtaining voting instructions from clients to Broadridge Financial Solutions, Inc. (“Broadridge”). Broadridge typically prepares a machine readable voting instruction form which is mailed to Beneficial Shareholders with a request that Beneficial Shareholders return the forms to Broadridge or follow specified telephone or internet based voting procedures. Broadridge then tabulates the results of the voting instructions received and provides appropriate instructions regarding the voting of Common Shares to be represented at the Meeting. A Beneficial Shareholder receiving a voting instruction form from Broadridge cannot use that form to vote Common Shares directly at the Meeting. The voting instruction form must be returned to Broadridge or voting instructions communicated to Broadridge well in advance of the Meeting in order to have such Common Shares voted at the Meeting.

Although a Beneficial Shareholder may not be recognized directly at the Meeting for the purposes of voting Common Shares registered in the name of his or her broker or other intermediary, a Beneficial Shareholder may attend the Meeting as proxyholder for the registered Shareholder and vote the Common Shares in that capacity. Beneficial Shareholders who wish to attend the Meeting and indirectly vote their Common Shares must do so as proxyholder for the registered Shareholder. They should contact their broker, agent or other intermediary well in advance of the Meeting.

Voting of Proxies

All Common Shares represented at the Meeting by a properly executed proxy will be voted on any ballot that may be called for, and where a choice with respect to any matter to be acted upon has been specified in the proxy, the Common Shares represented by the proxy will be voted or withheld from voting in accordance with such specification. In the absence of any such specification or instruction, the persons whose names appear on the form of proxy, if named as proxies, will vote in favour of all of the matters set out in the Notice of Meeting.

The enclosed form of proxy confers discretionary authority upon the persons named therein with respect to amendments or variations to matters identified in the Notice of Meeting and any other matters which may properly come before the Meeting. As of the date hereof, Management is not aware of any amendments, variations or other matters to be presented for action at the Meeting. If, however,

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amendments, variations or other matters properly come before the Meeting, the persons designated in the form of proxy will vote thereon in accordance with their judgment pursuant to the discretionary authority conferred by such proxy with respect to such matters.

VOTING SHARES AND PRINCIPAL HOLDERS

Shareholders of record as of the close of business on September 16, 2011 are entitled to receive notice of and vote at the Meeting on the basis of one vote for each Common Share held, except to the extent that a registered Shareholder has transferred the ownership of any Common Shares, subsequent to September 16, 2011 and the transferee produces a properly endorsed share certificate, or otherwise establishes that he or she owns the Common Shares and demands, not later than 10 days before the Meeting, that his or her name be included on the Shareholder list for the Meeting, in which case, the transferee shall be entitled to vote his or her Common Shares at the Meeting. The transfer books will not be closed.

The Corporation has authorized capital consisting of an unlimited number of Common Shares, first preferred shares, issuable in series and limited to one half of the number of Common Shares issued and outstanding at the relevant time, and one special voting share. As at September 13, 2011, an aggregate of 25,125,000 Common Shares, no first preferred shares and one special voting share were issued and outstanding as fully paid and non assessable. The special voting share is owned by Enbridge and provides the holder with the right to elect one Director to the Board for so long as the holder beneficially owns or controls, directly or indirectly, between 15% and 39% of the issued and outstanding Common Shares.

To the knowledge of the Directors and of the senior officers of the Manager, the following sets out the only persons, firms or corporations, owning of record or beneficially, controlling or directing, directly or indirectly, 10% or more of the issued and outstanding Common Shares:

Name Type of OwnershipNumber of Common Shares

Held% of Common Shares

OwnedCDS & Co. Of Record 20,125,000 80.1%Enbridge Inc. Of Record and Beneficial 5,000,000 19.9%

Enbridge also owns 27.43% of the issued and outstanding Fund Units and all of the issued and outstanding ECT Preferred Units which may be exchanged at any time by Enbridge for Fund Units on a 1:1 basis. If the ECT Preferred Units are fully exchanged, Enbridge will own 65% of the Fund Units. Accordingly, Enbridge and each of its affiliates is a Related Party of the Corporation and the Fund.

Pursuant to MI 61-101, as certain steps contemplated in the Transaction constitute “related party transactions”, the Resolution must be approved by a majority of the votes held by Disinterested Shareholders. Votes attached to Common Shares beneficially owned, or over which control or direction is exercised by Enbridge, a Related Party of Enbridge or any Joint Actor of Enbridge, shall be excluded. To the knowledge of the Corporation, after reasonable inquiry, an aggregate of 5,192,944 Common Shares shall be excluded in determining Disinterested Shareholder approval of the Transaction. See “Approval of the Transaction”.

MATTERS TO BE ACTED UPON AT THE MEETING

The Transaction

The Transaction involves the acquisition by the Fund, through indirect wholly-owned Subsidiaries, of interests in entities that own the Renewable Assets for an aggregate price of $1.23 billion, subject to adjustment.

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The Transaction is proposed to be effected as follows:

1. The Corporation will complete the Financing for aggregate gross proceeds of $219.5 million and will issue Common Shares at the same price to Enbridge for aggregate gross proceeds of $54.5 million.

2. The Corporation will use the proceeds from the Financing and from the issuance of Common Shares to Enbridge of $274 million, to purchase 14,616,000 additional Fund Units at a price of $18.75 per Fund Unit.

3. Enbridge will lend $655 million to the Fund. The loan will have a 10-year maturity, accrue interest at the rate of 6% per annum with interest payable semi-annually on May 31 and November 30 of each year, be repayable at any time, from time to time, in whole or in part, without penalty or bonus and be unsecured and subordinate to all external debt issued by the Fund.

4. The Fund will use $929 million of the proceeds it receives pursuant to steps 2 and 3 above to purchase 49,549,333 ECT Common Units at a price of $18.75 per unit.

5. Enbridge will purchase 16,051,000 ECT Preferred Units at a price of $18.75 per unit for the aggregate sum of $301 million, with a redemption value of $18.75 per unit and a maturity date of June 30, 2033.

6. ECT will use the funds it receives pursuant to steps 4 and 5 above to subscribe for additional units of EIPLP for the aggregate sum of $1.23 billion and to subscribe for common shares of EIPGP for the aggregate sum of $123,000.

7. EIPGP will use the $123,000 it receives pursuant to step 6 to subscribe for units of EIPLP, such that it will maintain a 0.01% interest in EIPLP.

8. EIPLP will use the funds it receives pursuant to steps 6 and 7 above to subscribe for additional shares of EIPHI for the aggregate sum of $656.5 million and additional shares of Sask for the aggregate sum of $559.3 million.

9. Sask will use some of the funds it receives pursuant to step 8 above to subscribe for additional shares of Westspur for the aggregate sum of $267.5 million and additional shares of Weyburn for the aggregate sum of $48.6 million.

10. EIPLP will use some of the funds it receives pursuant to step 6 above to purchase from Enbridge all of the issued and outstanding shares of ERlC for $2.7 million, of 1682399 (which owns a relatively small limited partnership interest in ERIP) for $11.5 million and of Talbot GP for $34,000. All of these entities will become wholly-owned Subsidiaries of EIPLP.

11. EIPHI and Sask will use the remainder of the funds they receive pursuant to step 8 above and Westspur and Weyburn will use all of the funds they receive pursuant to step 9 above, to subscribe for limited partnership units of ERIP in the aggregate amount of $875.8 million and Talbot LP in the aggregate amount of $340 million. ERIP owns the Sarnia Solar Project, the Ontario Wind Project and all of the issued and outstanding shares of ON Farms. Talbot LP owns the Talbot Wind Project.

12. ERIP and Talbot LP will use the funds they receive pursuant to step 11 above to purchase for cancellation all of their respective limited partnership units held by EPI, such that all of the entities that own the Renewable Assets will be owned by indirect wholly-owned Subsidiaries of the Fund.

13. The subscription prices in step 11 and the cancellation payments in step 12 are subject to adjustment within 60 days of Closing, to the extent that working capital at Closing of ERIP and Talbot LP are not $8.4 million and $3.3 million, respectively. Specifically, if the working capital balance is higher or lower than the specified amount, the subscribers will make a payment to or receive from the

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applicable limited partnership as an adjustment to the subscription price and the limited partnership will make a payment to EPI or receive a payment from EPI as an adjustment to the cancellation payment.

Enbridge will ensure that all debts, liabilities and obligations accrued or incurred prior to closing in Talbot LP, Talbot GP, ERIP, ERIC, ON Farms and 1682399 are paid, or that appropriate adjustments are made.

See “Post Closing Matters” for an illustration of the corporate structure of the Corporation and the Fund assuming closing of the Transaction.

The PSPCA

The following is a summary only of certain material provisions of the PSPCA. It is not intended to be comprehensive and is qualified in its entirety by reference to the full text of the PSPCA which will be filed on SEDAR at www.sedar.com. The capitalized terms defined in this section are specific to this section.

On September 8, 2011, Enbridge, Talbot LP, ERIP and EPI and EIPLP, Sask, Westspur, Weyburn and EIPHI entered into the PSPCA, pursuant to which, subject to the terms and conditions set forth in the PSPCA, (i) EIPLP would acquire (the “Share Purchase”) all of the issued and outstanding shares of Talbot GP, ERIC and 1682399 for an aggregate purchase price of $14.2 million (the “Share Purchase Price”), (ii) Sask, Westspur, Weyburn and EIPHI (collectively, the “Subscribers”) would subscribe (the “Subscription”) for units of Talbot LP for an aggregate subscription price of $340 million (the “Talbot Subscription Price”) and units of ERIP for an aggregate subscription price of $875.8 million (the “ERIP Subscription Price”), and (iii) Talbot LP and ERIP would purchase for cancellation (the “Purchase for Cancellation”) all of the units of Talbot LP held by EPI for an aggregate purchase price of $340 million (the “Cancelled Talbot Units Purchase Price”) and all of the units of ERIP held by EPI for an aggregate purchase price of $875.8 million (the “Cancelled ERIP Units Purchase Price”).

Conditions Precedent

The PSPCA provides that completion of the Transaction is subject to a number of conditions either being satisfied or waived, including without limitation, completion of the Financing and the Enbridge Financing, Disinterested Shareholder approval and TSX approval. There is no certainty that the balance of such conditions will be satisfied or waived on a timely basis, or at all.

Representations and Warranties

The PSPCA contains representations and warranties of the parties to the PSPCA as of specific dates, made solely for purposes of the Transaction. Such representations and warranties may be subject to qualifications and limitations which have the effect of modifying or reallocating certain risks.

The PSPCA contains customary representations and warranties:

(a) by Enbridge in favour of EIPLP in connection with the Share Purchase relating to the following matters, among others, with respect to Talbot GP, ERIC and 1682399: organization and qualification; capitalization; authority of Enbridge relative to the PSPCA; required authorizations to complete the Share Purchase; no violations; litigation; material contracts; tax matters; permits; financial statements; liabilities; title to assets; insurance; employment agreements; pension and employee benefits; intellectual property; ownership of subsidiaries; compliance with laws; no insolvency or bankruptcy proceedings; conduct of the business in the ordinary course; and sufficiency of assets;

(b) by EIPLP in favour of Enbridge relating to the following matters, among others, in connection with the Share Purchase: organization and qualification; authority relative to the PSPCA; required authorizations to complete the Share Purchase; no violations; and residency;

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(c) by ERIP and Talbot LP in favour of the Subscribers relating to the following matters, among others, in connection with the Subscription: organization and qualification; capitalization; authority relative to the PSPCA; valid issuance of subscribed units; required authorizations to complete the Subscription; no violations; litigation; material contracts; tax matters; permits; financial statements; real property; environment; liabilities; title to assets; insurance; employment agreements; pension and employee benefits; intellectual property; ownership of subsidiaries; compliance with laws; no insolvency or bankruptcy proceedings; conduct of the business in the ordinary course; and sufficiency of assets;

(d) by the Subscribers in favour of ERIP and Talbot LP relating to the following matters, among others, in connection with the Subscription: organization and qualification; authority relative to the PSPCA; required authorizations to complete the Subscription; no violations; residency; accredited investor status; and other securities laws matters;

(e) by ERIP and Talbot LP in favour of EPI relating to the following matters, among others, in connection with the Purchase for Cancellation: organization and qualification; authority relative to the PSPCA; required authorizations to complete the Purchase for Cancellation; and no violations; and

(f) by EPI in favour of ERIP and Talbot LP relating to the following matters, among others, in connection with the Purchase for Cancellation: organization and qualification; authority relative to the PSPCA; required authorizations to complete the Purchase for Cancellation; no violations; ownership of units of ERIP and Talbot LP; and residency.

Covenants

The PSPCA contains customary negative and affirmative covenants on the part of the parties to the PSPCA, including, without limitation: that the businesses comprising the Renewable Assets will be conducted in the usual and ordinary course; reasonable commercial efforts will be used to maintain and preserve such businesses, organization, goodwill and business relationships; reasonable commercial efforts will be used to ensure current insurance policies or coverages are not cancelled or terminated; books, records and accounts will be maintained in the usual and ordinary course; and as to certain tax matters.

Indemnification

Pursuant to the PSPCA:

(a) Enbridge has agreed to indemnify EIP LP, EIP GP and their respective directors, officers, employees and agents for any losses, in an amount not to exceed the Share Purchase Price, arising from (i) any breach of representation, warranty or covenant by Enbridge, or (ii) any taxes owing by any of Talbot GP, ERIC or 1682399 in respect of any period ending on or prior to the closing of the Transaction;

(b) EIP LP has agreed to indemnify Enbridge and its directors, officers, employees and agents for any losses, in an amount not to exceed the Share Purchase Price, arising from (i) any breach of representation, warranty or covenant by EIP LP, (ii) any overpayment of taxes by Talbot GP, ERIC or 1682399 in respect of any period ending on or prior to the closing of the Transaction, or (iii) any costs or interest incurred by Enbridge in connection with the replacement by the Subscribers of the letters of credit posted by Enbridge with the OPA and the Municipality of Kincardine in connection with the Renewable Assets;

(c) Talbot LP has agreed to indemnify the Subscribers and their respective directors, officers, employees and agents from any losses, in an amount not to exceed the Talbot Subscription Price, arising from (i) any breach of representation, warranty or covenant by Talbot LP, or

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(ii) any taxes owing by Talbot LP in respect of any period ending on or prior to the closing of the Transaction;

(d) ERIP has agreed to indemnify the Subscribers and their respective directors, officers, employees and agents from any losses, in an amount not to exceed the ERIP Subscription Price, arising from (i) any breach of representation, warranty or covenant by ERIP, or (ii) any taxes owing by ERIP in respect of any period ending on or prior to the closing of the Transaction;

(e) each Subscriber has agreed to indemnify Talbot LP, Talbot GP and their respective directors, officers, employees and agents from any losses, in an amount not to exceed such Subscriber’s pro-rata share of the Talbot Subscription Price, arising from any breach of representation, warranty or covenant by such Subscriber;

(f) each Subscriber has agreed to indemnify ERIP, ERIC and their respective directors, officers, employees and agents from any losses, in an amount not to exceed such Subscriber’s pro-rata share of the ERIP Subscription Price, arising from any breach of representation, warranty or covenant by such Subscriber;

(g) Talbot LP has agreed to indemnify EPI and its directors, officers, employees and agents from any losses, in an amount not to exceed the Cancelled Talbot Units Purchase Price, arising from (i) any breach of representation, warranty or covenant by Talbot LP, (ii) any overpayment of taxes by Talbot LP in respect of any period ending on or prior to the closing of the Transaction; or (iii) any costs or interest incurred by EPI in connection with the replacement by Talbot LP of the letter of credit posted by EPI with the OPA in connection with the Renewable Assets;

(h) ERIP has agreed to indemnify EPI and its directors, officers, employees and agents from any losses, in an amount not to exceed the Cancelled ERIP Units Purchase Price, arising from (i) any breach of representation, warranty or covenant by ERIP, or (ii) any overpayment of taxes by ERIP in respect of any period ending on or prior to the closing of the Transaction;

(i) EPI has agreed to indemnify Talbot LP, Talbot GP and their respective directors, officers, employees and agents from any losses, in an amount not to exceed the Cancelled Talbot Units Purchase Price, arising from (i) any breach of representation, warranty or covenant by EPI, or (ii) any taxes owing or that may become owing by Talbot LP in respect of any period ending on or prior to the closing of the Transaction; and

(j) EPI has agreed to indemnify ERIP, ERIC and their respective directors, officers, employees and agents from any losses, in an amount not to exceed the Cancelled ERIP Units Purchase Price, arising from (i) any breach of representation, warranty or covenant by EPI, or (ii) any taxes owing by ERIP in respect of any period ending on or prior to the closing of the Transaction.

EPI has agreed to guarantee the performance by Talbot LP and ERIP of their obligations owing to the Subscribers under the PSPCA, including indemnification obligations. Generally, claims for indemnification for a breach of representation or warranty under the PSPCA must be made within 18 months of the closing of the Transaction except (i) in the case of tax-related representations and warranties which will survive until the expiration of the last of the applicable statutory limitation periods plus 60 days, and (ii) in the case of representations and warranties relating to ownership of assets, which will survive indefinitely.

The Financing

The Financing is a condition precedent to the completion of the Transaction. On September 8, 2011, the Corporation entered into a definitive agreement with RBC Dominion Securities Inc., on behalf of the

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Underwriters, for the sale by the Corporation on a bought deal basis of an aggregate of 11,707,000 Subscription Receipts at a price of $18.75 per Subscription Receipt, for gross proceeds of $219.5 million. The Corporation intends to file a short form preliminary prospectus on September 14, 2011 to qualify the distribution of the Subscription Receipts and the Common Shares issuable on exchange of the Subscription Receipts.

Each Subscription Receipt will be automatically exchanged immediately prior to closing of the Transaction and upon satisfaction of certain escrow release conditions for one Common Share, plus an amount, if any, equal to the dividends declared by the Corporation on the Common Shares to holders of record on a date during the period from the closing of the Financing to the closing of the Transaction, without any further action or additional consideration on the part of the holder. The proceeds from the sale of Subscription Receipts will be held by an escrow agent and invested in short term obligations of, or guaranteed by, the Government of Canada (and other approved investments) until the earlier of the closing of the Transaction and December 31, 2011 (the “Termination Date”). If the closing of the Transaction does not occur on or before the Termination Date, or is terminated at any earlier time, the Subscription Receipts will be terminated and cancelled, and the full purchase price of the Subscription Receipts will be returned to holders of Subscription Receipts, together with their pro rata portion of interest earned thereon. In connection with the Transaction, concurrent with the exchange of the Subscription Receipts for Common Shares immediately prior to the closing of the Transaction, Enbridge will subscribe for Common Shares at a price of $18.75 per Common Share for gross proceeds of $54.5 million, in order to maintain its 19.9% holding of Common Shares.

Closing of the Transaction

Closing of the Transaction will occur upon satisfaction or waiver of all of the conditions precedent and is expected to occur as soon as practicable following receipt of Disinterested Shareholder approval.

Pre-emptive Rights

Pursuant to the restructuring of the Fund completed on December 17, 2010, the Fund Trust Indenture was amended to provide the Corporation and Enbridge with identical pre-emptive rights to acquire any Fund Units proposed to be issued by the Fund in proportion to their respective pre-issuance economic interest in the Fund, inclusive, in the case of Enbridge, of the ECT Preferred Units held by Enbridge. At the request of the Corporation, Enbridge has agreed to waive such pre-emptive rights in respect of the Fund Units to be issued pursuant to the Transaction, to enable the Corporation to acquire all of the Fund Units to be issued to partially fund the acquisition of the Renewable Assets.

ECT Trust Indenture

Immediately prior to the closing of the Transaction, the ECT Trust Indenture will be amended: (i) to enable ECT to issue ECT Preferred Units in series to enable ECT to issue ECT Preferred Units to Enbridge having a redemption price and liquidation preference equal to the issue price of such ECT Preferred Units; and (ii) to fix the number of ECT Trustees at eight in the event Enbridge and its affiliates hold or control, directly or indirectly, more than 10% but less than 25% of the issued and outstanding Fund Units.

Description of the Renewable Assets

The Renewable Assets consist of one 80 MW solar project and two onshore wind projects with installed capacity of 189.75 MW and 99 MW, all located in Ontario, Canada. Each of the Renewable Assets is currently operating and has long-term PPAs with the OPA, as well as full service O&M Contracts with third-parties.

Both solar and wind power generation utilize naturally occurring elements – solar relies on radiation from the sun, and wind relies on naturally occurring air flow patterns and velocity, to turn turbines to generate electricity. The operating costs of producing electricity through solar or wind resources are significantly lower than most other technologies, given the absence of fuel costs.

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Sarnia Solar Project

Overview

Location Southern shore of Lake Huron (in city of Sarnia)Capacity (AC) 80 MW (8 x 10 MW)Technology Thin Film (First Solar)Energy Purchaser OPA (Sarnia RESOP Agreements)PPA Term 20 years, terminating between 2028 and 2030ERPI $5/MWh for 10 yearsLand Leases None (land owned by ON Farms)O&M Contract First Solar – 10 year agreement (option to renew for another 10 years)In Service Phase 1 (20 MW) – December 2009

Phase 2 (60 WM) – September 2010

The Sarnia Solar Project is currently the world’s largest operational photovoltaic solar power project. It is situated on the southern shore of Lake Huron, in the City of Sarnia, Ontario on 950 acres of land owned by ON Farms and consists of eight individual 10 MW segments, comprising a total capacity of 80 MW. The Sarnia Solar Project utilizes cadmium telluride thin film PV solar modules manufactured by First Solar, which is considered a leading manufacturer of solar PV modules. These modules have been used and tested in over 1,000 MW of projects in the United States and Europe over the past seven years. There are

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approximately 1.3 million thin film panels with a surface area of approximately 966,000 m2. First Solar has provided a 25 year manufacturer’s warranty for 90% of the nominal power over the first ten years of the project and 80% thereafter.

Solar resource assessments commissioned by Enbridge from independent experts estimate the solar capacity factor of the Sarnia Solar Project to be 17.1%.

Ownership of the Project

The Sarnia Solar Project is 100% owned by ERIP, a limited partnership established under the laws of Ontario on November 17, 2005. ERIC is the general partner of ERIP. ERIC was incorporated on October 17, 2005 under the Canada Business Corporations Act and extra-provincially registered in Ontario on November 17, 2005. ERIP is owned by EPI (99.69266%), ERIC (0.30731%) and 1682399 (0.0003%), all of which are direct or indirect wholly-owned subsidiaries of Enbridge. The Transaction contemplates that these entities will be wholly-owned, directly or indirectly, by subsidiaries of the Fund: EIPLP will own 100% of the issued and outstanding shares of ERIC and 1682399, and EIPHI, Sask, Westspur and Weyburn will collectively own 100% of the issued and outstanding limited partnership units of ERIP. See diagram under “Post-Closing Matters – Corporate Structure”.

Three Year History

First Solar developed, engineered and constructed the facilities at the Sarnia Solar Project. Phase I (20 MW) was completed and placed in service in December 2009 and Phase II (60 MW) was completed and placed in service in September 2010, each pursuant to a fixed price EPC Agreement with First Solar. The total capital cost of the Sarnia Solar Project was approximately $400 million.

Operations and Maintenance

First Solar operates and maintains the Sarnia Solar Project pursuant to the Sarnia Operating Agreement. Under the Sarnia Operating Agreement, First Solar is responsible for providing all work, services, labour, equipment and materials necessary to maintain and operate the Sarnia Solar Project. First Solar provides preventative and scheduled maintenance, warranty and parts management, as well as continuous system monitoring, emergency response and monthly/annual performance reports. First Solar and ERIP meet annually to discuss the annual maintenance plan and make modifications thereto as deemed necessary. The Sarnia Operating Agreement has an initial term of 10 years expiring on September 9, 2020 and may be renewed on the same terms (other than in respect of the right of renewal) at ERIP’s option for an additional 10 years. ERIP pays fixed quarterly fees for these services depending on performance criteria and subject to various adjustments, including for inflation.

Power Purchase Agreements

The Sarnia Solar Project currently operates under the Sarnia RESOP Agreements, whereby electrical power production delivered from each segment of the Sarnia Solar Project is sold under 20 year fixed price PPAs with the OPA under which the OPA pays $420/MWh for supplied power. The Sarnia RESOP Agreements require that the power delivered from the Sarnia Solar Project be sold exclusively to the OPA. In addition, under the Sarnia RESOP Agreements, ERIP assigned to the OPA all of its right and title to any environmental credits and attributes, ancillary services and all products related to the rated, continuous load-carrying capability of the Sarnia Solar Project to generate and deliver electricity.

Each Sarnia RESOP Agreement is for a term of 20 years commencing on the commercial operation date of the facility or phase related to the Sarnia RESOP Agreement and may be terminated earlier in accordance with its terms but may not be unilaterally terminated except for an event of default. As the commercial operation dates for each of the eight segments comprising the Sarnia Solar Project occurred between December 2008 and August 2010, the Sarnia RESOP Agreements will terminate between December 2028 and August 2030.

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ecoEnergy Program Incentives

The Sarnia Solar Project is subject to the Sarnia Contribution Agreements which provide for an incentive under the ecoEnergy Program of $10/MWh for power production during the first 10 years of operations. The incentive payable under each Sarnia Contribution Agreement is limited to a maximum of approximately $1.4 million for 10 years and a maximum of approximately $145,000 per fiscal year. Pursuant to the Sarnia RESOP Agreements, the Sarnia Solar Project must share equally with the OPA the incentives received under the Sarnia Contribution Agreements. The Sarnia Contribution Agreements require, among other things, metering of the power delivered, compliance with environmental legislation, submission of quarterly claims, and an annual report that outlines the actual performance in each operational year, including special reporting in the first year of the term.

Pursuant to the Sarnia Contribution Agreements, the federal Minister of Natural Resources will review the expected annual performance of the Sarnia Solar Project after eight quarters of production and if the expected annual production has not been met, then the Minister may change the incentive. In the event the Sarnia Solar Project generates revenues greater than a specified threshold level, the incentive will be suspended for the following year and the surplus revenues will be payable to the federal government up to the level of the incentives received.

Talbot Wind Project

Overview

Location Northern shore of Lake Erie Capacity 98.9 MWTechnology (turbines) 43 Siemens Energy SWT 2.3-101Energy Purchaser OPA (Talbot PPA)PPA Term 20 years, terminating 2031ERPI $10/MWh for 10 yearsLand Leases 25 years with right of first opportunity to negotiate a new lease after the initial

termO&M Contract 5 year, fixed price agreement with SCLIn Service December 2010

The Talbot Wind Project is a 98.9 MW wind power project situated on the northern shore of Lake Erie, near Chatham, Ontario on lands subject to leases and easements. The majority of the leases are for 25 year terms from the commencement date of electrical generation. The easements are generally either for 25 year terms or continue in perpetuity until terminated by Talbot LP.

The Talbot Wind Project utilizes 43 Siemens Energy SWT 2.3-101 wind turbines, each with a rated capacity of 2.3 MW. Siemens is among the world’s largest suppliers of wind turbines, with over 7,800 wind turbines deployed worldwide.

The Talbot Wind Project is located in an area offering strong wind resources. Wind resource assessment experts retained by Enbridge have estimated the net capacity factor for the Talbot Wind Project to be approximately 35%.


The Talbot Wind Project is 100% owned by Talbot LP, a limited partnership established under the laws of Ontario on June 12, 2009, which is 99.99% owned by EPI and 0.01% owned by Talbot GP, the general partner of Talbot LP. Talbot GP was incorporated under the laws of New Brunswick on June 8, 2009 and extra-provincially registered in Ontario on June 10, 2009. All of the issued and outstanding shares of Talbot

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GP are currently owned by Enbridge. The Transaction contemplates that Talbot LP and Talbot GP will be wholly-owned, directly or indirectly, by subsidiaries of the Fund: EIPLP will own 100% of the issued and outstanding shares of Talbot GP, and EIPHI, Sask, Westspur and Weyburn will collectively own 99.99% of the issued and outstanding limited partnership units of Talbot LP, with Talbot GP owning the remaining 0.01%. See diagram under “Post-Closing Matters – Corporate Structure”.

Three Year History

The Talbot Wind Project was developed by RES. Pursuant to a subscription agreement between RES, Enbridge, EPI, Talbot LP and Talbot GP dated November 18, 2009, Enbridge and EPI acquired a 90% interest in Talbot GP and Talbot LP from RES. On June 14, 2011, Enbridge and EPI exercised their option to acquire the remaining 10% interest by acquiring from RES all of the remaining limited partnership units and shares in Talbot LP and Talbot GP, respectively, at a predetermined price. Pursuant to a fixed price EPC Agreement between RES Canada Construction L.P. and Talbot LP dated November 14, 2009, RES Canada Construction L.P. developed, engineered and constructed the Talbot Wind Project facilities. The Talbot Wind Project was completed and placed in service in December 2010 at a total capital cost of approximately $285 million.


RES Wind operates, manages and maintains the Talbot Wind Project pursuant to the RES Management Agreement. The RES Management Agreement has a term of one year, which commenced in December 2010 and may be extended for one year with the agreement of both parties. RES Wind receives an annual fixed base fee and may receive compensation for certain other services and expenses. The base fee and other fees may be adjusted upward for inflation if the agreement is renewed (and in other limited circumstances).

Pursuant to the Service Agreement, SCL provides all services, labour, equipment and materials necessary to service and maintain the wind turbines comprising the Talbot Wind Project. The Service Agreement is for a term of five years and provides a warranty for SCL supplied items, including coverage for serial defects and also provides performance warranties relating to sound and availability (guaranteeing 95% availability). SCL receives a daily fixed service fee per wind turbine, adjusted annually by the percentage change in the CPI for the Province of Ontario.

Power Purchase Agreement

Talbot LP has entered into a long-term contract with the OPA in respect of the sale of electricity pursuant to the Talbot PPA. The Talbot PPA is in effect until December, 2031 unless terminated earlier in accordance with its terms. Neither party may terminate the Talbot PPA unilaterally except in the event of a default by the other party. Talbot LP is required to bid electric power contracted under the Talbot PPA pursuant to the IESO Market Rules and is paid the Hourly Ontario Energy Price and, is either paid or pays, an amount from or to the OPA to cover any differences between the fixed price per MWh agreed to under the Talbot PPA, and the Hourly Ontario Energy Price. The fixed-price agreed to under the Talbot PPA is subject to an indexing mechanism after the first 10 years of the contract. In addition, the OPA is entitled to all environmental credits and attributes, ancillary services and transmission rights related to or generated by the Talbot Wind Project.

The Talbot PPA protects Talbot LP against cost increases incurred or revenues lost as a result of any “discriminatory action” (as defined in the Talbot PPA) taken by the Legislative Assembly of Ontario which amends the Talbot PPA without Talbot's consent or which increases the costs that Talbot LP would have reasonably expected to incur under the Talbot PPA, other than a change of law of general application, including an increase in taxes of general application. Talbot LP is entitled to compensation for the increase in costs or loss of revenues of Talbot LP due to such discriminatory action if determined by agreement between the parties or through binding arbitration. In the case of changes to the Market Rules that have a material effect on the Talbot Wind Project’s economics, the Talbot PPA requires the parties to negotiate in good faith or arbitrate to amend the PPA.

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ecoEnergy Program Incentive

In addition to the payments due under the Talbot PPA, the Talbot Wind Project also qualifies for incentives under the ecoEnergy Program. Pursuant to the Talbot Contribution Agreement, Talbot LP can earn an additional $10/MWh for energy delivered during the first 10 years of operations to a maximum of approximately $30 million over a 10 year period and to a maximum of approximately $3 million per fiscal year.

Pursuant to the Talbot Contribution Agreement, the federal Minister of Natural Resources will review the expected annual performance of the Talbot Wind Project after eight quarters of production and if the expected annual production has not been met then the Minister may change the amount of the incentive. In the event that the Talbot Wind Project generates revenues greater than a specified threshold level, the incentive will be suspended for the following year and the surplus revenue will be payable to the federal government up to the level of the incentive received.

Ontario Wind Project

Overview

Location Near the shores of Lake Huron Capacity Kincardine – 181.5 MW

Cruickshank – 8.25 MWTechnology (turbines) 115 Vestas V82 1.65 MWEnergy Purchaser OPA Kincardine (PPA)

OPA Cruickshank (RESOP Agreement)PPA Term Kincardine: 20 years, terminating 2029 with option to renew for five years

Cruickshank: 20 years, terminating 2028ERPIs Kincardine: $10/MWh until 2019

Cruickshank: $5/MWh until 2018Land Leases 21 years with option to extend for another 21 yearsO&M Contract 7 year, fixed price agreement with Vestas expiring in 2018In Service December 2008 – February 2009

The Ontario Wind Project is the second largest operational wind farm in Canada, situated on two sites comprised of the Kincardine Wind Farm (181.5 MW) and the Cruickshank Wind Farm (8.25 MW), with an aggregate capacity of 189.75 MW. It is located near the shores of Lake Huron in Bruce County, Ontario pursuant to easements granted by the owners of the underlying real property. The easements are for terms of 21 years, with an option to renew for an additional 21 years on the same terms (other than the right to renew).

All of the 115 turbines utilized at the Ontario Wind Project are Vestas V82 turbines, with a rated capacity of 1.65 MW each. The Vestas group of companies is considered a world leader in the manufacture and service of wind turbines, with a total fleet of 44,495 turbines deployed worldwide.

The Ontario Wind Project is located in a region with strong wind resources. Wind resource assessment experts retained by Enbridge, taking into account recent operating history, estimate the long-term net capacity factor for the Ontario Wind Project to be 30%.


The Ontario Wind Project is 100% owned by ERIP, a limited partnership established under the laws of Ontario on November 17, 2005. ERIC is the general partner of ERIP. ERIC was incorporated on October 17, 2005 under the Canada Business Corporations Act and extra-provincially registered in Ontario on November 17,

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2005. ERIP is owned by EPI (99.69266%), ERIC (0.30731%) and 1682399 (0.0003%), all of which are direct or indirect wholly-owned subsidiaries of Enbridge. The Transaction contemplates that these entities will be wholly-owned, directly or indirectly, by subsidiaries of the Fund: EIPLP will own 100% of the issued and outstanding shares of ERIC and 1682399, and EIPHI, Sask, Westspur and Weyburn will collectively own 100% of the issued and outstanding limited partnership units of ERIP. See diagram under “Post-Closing Matters – Corporate Structure”.

Three Year History

In November 2005, Enbridge and Leader Wind Corp. were awarded two renewable energy projects following a joint submission in response to the Ontario Government’s Renewable Energy Supply RFP. Enbridge acquired the rights to develop the two wind farms comprising the Ontario Wind Project pursuant to a share purchase agreement between Enbridge and Leader Wind Corp. dated August 11, 2005. Enbridge Wind Energy Inc. acquired the shares of CWFL in July 2007. Enbridge began construction of the Ontario Wind Project in July 2007 and it was brought into service in phases between December 2008 and February 2009. Total capital cost was approximately $481 million. CWFL subsequently sold the Cruickshank Wind Farm assets to ERIP in August 2011.


Pursuant to the SMA, Vestas provides maintenance, diagnostic and repair services and/or parts for the serviced equipment located at the Ontario Wind Project sites. Vestas will perform scheduled maintenance in accordance with the intervals set forth in the SMA and a scheduled maintenance calendar. Vestas receives a fixed fee per wind turbine per year, payable in advance in equal quarterly instalments. The fee is adjusted annually by the percentage change in the Ontario CPI, provided that the fee will not be adjusted downward.

Power Purchase Agreements

Power produced from the Kincardine Wind Farm is sold to the OPA pursuant to the Kincardine PPA. The Kincardine PPA is in effect until February, 2029 unless terminated earlier in accordance with its terms. Neither party may unilaterally terminate the Kincardine PPA except in the event of a default by the other party. ERIP has the option to extend the term for one period of five years on the same terms. The OPA pays a price per MWh comprised of a fixed amount and an indexed amount, for all electric power delivered during the term. Any revenues derived from the sale of electricity above an established cap are shared equally by the parties. The Kincardine PPA also provides for potential incentive payments in certain situations. In addition, the OPA is entitled to all environmental credits and attributes, ancillary services and transmission rights related to the Kincardine PPA.

The Kincardine PPA protects ERIP against cost increases incurred or revenues lost as a result of any “discriminatory action” (as defined in the Kincardine PPA) taken by the Legislative Assembly of Ontario which amends the Kincardine PPA without ERIP's consent or which increases the costs that ERIP would have reasonably expected to incur under the Kincardine PPA, other than a change of law of general application, including an increase in taxes of general application. ERIP is entitled to compensation for the increase in costs or loss of revenues of ERIP due to such discriminatory action if determined by agreement between the parties or through binding arbitration. In the case of changes to laws or regulations that render a provision of the PPA invalid or unenforceable, the parties are obligated to negotiate in good faith or arbitrate to amend the PPA to replace such provision with one having an economic effect that comes as close as possible to the invalid provision.

All electric power delivered from the Cruickshank Wind Farm is sold at a fixed price of $110/MWh, comprised of a fixed portion of $88/MWh and an indexed portion of $22/MWh, under the 20 year Cruickshank RESOP Agreement which expires in 2028.

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ecoEnergy Program Incentives

The Ontario Wind Project also qualifies for incentives under the ecoEnergy Program. Pursuant to the Kincardine Contribution Agreement and the Cruickshank Contribution Agreement, production from the Kincardine Wind Farm and the Cruickshank Wind Farm can each earn an additional $10/MWh for electrical energy delivered within the first 10 years of operations. However, under the Cruickshank RESOP Agreement, the incentive received on the Cruickshank Wind Farm production must be shared equally with the OPA. The incentive under the Kincardine Contribution Agreement is limited to a maximum of approximately $47.7 million over a 10 year period and to a maximum of approximately $4.8 million per fiscal year. The incentive under the Cruickshank Contribution Agreement is limited to a maximum of approximately $2.4 million over a 10 year period and to a maximum of approximately $230,000 per fiscal year. The terms of the Kincardine Contribution Agreement and the Cruickshank Contribution Agreement are substantially the same as the terms of the Sarnia Contribution Agreements.

Operations and Results of Renewable Entities

This following discussion relating to the operations and results of the Renewable Entities should be read in conjunction with the unaudited interim combined financial statements of the Renewable Entities as at and for the three and six months ended June 30, 2011 and the combined financial statements of the Renewable Entities as at and for the years ended December 31, 2010 and 2009 included in Schedule “C” to this Circular. The combined financial statements have been prepared in accordance with CGAAP for the years ended December 31, 2010 and 2009, and ASPE for the periods ended June 30, 2011 and 2010.

All financial measures presented in the following discussion are expressed in millions of Canadian dollars unless otherwise indicated.

Year endedDecember 31,

2010 2009(millions of Canadian dollars)Power production revenue 67.7 38.8Earnings 27.5 9.1

Power production revenue is derived from the sale of electricity from wind and solar power generation at prices established under long-term PPAs. Power production revenue for the year ended December 31, 2010 totalled $67.7 million, an increase of $28.9 million over the prior year. The increase in revenue primarily reflected the commencement of commercial operation of the Sarnia Solar Project, with the first 20 MW of capacity completed in December 2009 followed by the 60 MW expansion project in September 2010. The increase in revenue in 2010 also included improved contributions from the Ontario Wind Project, which benefited from a higher wind capacity factor in 2010 as well as greater operational availability. The Ontario Wind Project experienced lower power production in 2009 due to start up conditions and grid connectivity issues that have since been resolved.

Earnings for the year ended December 31, 2010 of $27.5 million exceeded the prior year by $18.4 million. The increase in earnings was primarily due to an increase in power production revenue following the completion of the Sarnia Solar Project, as indicated above, partially offset by related increases in operating costs and depreciation expense of $1.2 million and $7.1 million, respectively.

Three months endedJune 30,

Six months endedJune 30,

2011 2010 2011 2010(millions of Canadian dollars)Power production revenue 38.0 13.8 70.8 28.0Earnings 20.6 5.0 35.8 10.7

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The Renewable Entities achieved increases in both revenues and earnings in the first half of 2011 compared with the same period in 2010. The increases for the three and six month periods ended June 30, 2011 compared with the three and six month periods ended June 30, 2010 were primarily the result of the completion of the 60 MW Sarnia Solar Project expansion in September 2010 and commencement of commercial operations of the Talbot Wind Project in late December 2010. The Ontario Wind Project also delivered improved earnings in both the second quarter of 2011 and for the six months ended June 30, 2011 compared with the corresponding periods of 2010 due to stronger wind resources.

Summary Financial Information for the Renewable Entities

The following table sets out selected financial information for the Renewable Entities. The financial information has been derived from and should be read in conjunction with the combined financial statements of the Renewable Entities for the years ended December 2010 and 2009 and the unaudited combined financial statements of the Renewable Entities for the three and six-month periods ended June 30, 2011 and 2010 and the notes thereto included in Schedule “C” to this Circular. The combined financial statements have been prepared in accordance with CGAAP for the years ended December 31, 2010 and 2009 and in accordance with ASPE for the periods ended June 30, 2011 and 2010.


Year endedDecember 31,

2011 2010 2010 2009(unaudited millions of Canadian dollars)Statement of Earnings DataRevenue 70.8 28.0 67.7 38.8Earnings 35.8 10.7 27.5 9.1

Statement of Financial Position DataCurrent assets 73.0 62.6 17.6Non-current assets 1,093.5 1,118.4 650.9Current liabilities 16.0 37.1 31.3Non-current liabilities 5.2 6.1 4.6

Summary Pro Forma Financial Information

The following tables set out selected unaudited pro forma financial information for the Fund and the Corporation for the year ended December 31, 2010 and for the six months ended June 30, 2011 after giving effect to the Transaction and the adjustments thereto. More detailed financial information relating to the Fund is available in the audited financial statements of the Fund for the year ended December 31, 2010 and the unaudited consolidated financial statements for the six months ended June 30, 2011 available on SEDAR at www.sedar.com. More detailed information related to the Corporation can be found in the unaudited financial statements for the Corporation for the six months ended June 30, 2011. The summary pro forma financial information set out below has been derived from the unaudited pro forma financials statements included in Schedule “C” to this Circular and should be read in conjunction with such statements and notes thereto. The pro forma consolidated financial statements for the Fund for the six months ended June 30, 2011 and for the year ended December 31, 2010 have been prepared in accordance with CGAAP. The pro forma financial statements for the Corporation for the six months ended June 30, 2011 and the period ended December 31, 2010 have been prepared in accordance with International Financial Reporting Standards.

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Enbridge Income FundSix months ended

June 30,Year ended

December 31,2011 2010

(unaudited, millions of Canadian dollars)Statement of Earnings DataRevenue 242.8 395.8Earnings (loss) 39.2 1.2

Statement of Financial Position DataCurrent assets 103.3Non-current assets 3,312.6Current liabilities 124.8Non-current liabilities 2,344.7

Enbridge Income Fund Holdings Inc.Six months ended

June 30,Period from March 26,2010 to December 31,

2011 2010(unaudited, millions of Canadian dollars)Statement of Earnings DataRevenue 17.4 -Earnings (loss) 13.7 -

Statement of Financial Position DataCurrent assets 10.2Non-current assets 741.4Current liabilities 10.2Non-current liabilities 4.9

Renewable Energy Industry Overview

Renewable Energy Market Fundamentals

A summary of the market fundamentals for renewable energy infrastructure in North America and the regulatory and economic environment in which the Fund will be operating the Renewable Assets is provided below. Given that the Renewable Assets are in operation and selling power under existing long term contracts, it is not expected that the economic trends and industry developments discussed below will have a direct effect on their performance. Specific risks associated with the Transaction and ownership of the Renewable Assets are discussed under the heading “Risk Factors”.

North American electricity demand growth is expected to return to previous levels as the economy continues to recover from the recession. After a weakening of demand in 2008 and 2009, North American electricity load growth began to recover in 2010. Over the longer term, North American economic growth is anticipated to drive growing electricity consumption. North American GDP is expected to grow by 2.7% annually over the next 15 years while electricity demand is expected to increase correspondingly by an average of 1.0% to 2.0% annually according to the PIRA Energy Group.

Growing electricity demand is expected to drive new generation capacity growth. Energy analysts generally believe that the new generation capacity mix over the next 20 years will shift to lower-carbon options such as natural gas and renewable power generation. Although coal and nuclear facilities will continue to provide core generation needs in North America, various emission regulations are anticipated which may force the retirement of aging coal-fired units and restrict the permitting of new coal fired electrical generation facilities absent carbon capture and storage technologies or new nuclear facilities. As a result, according to the US Energy Information Administration, North America is expected to require alternative sources of power generation to meet growing electricity demand. Renewable energy sources including biomass, hydro, solar and wind are expected to play an increasingly important role in the supply of longer term electricity needs.

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All of the Renewable Assets are located in Ontario, which is Canada’s second largest electricity producer. Itsmain sources of power generation are from hydro, nuclear and coal generation. Ontario’s Green Energy Act, which received Royal Assent in 2009, was created to boost investment in renewable power in the Province and to foster economic growth and jobs from the renewable energy sector. Although the proportion of power generation from renewable sources is still relatively small, the Ontario Government has indicated an interest in increasing the Province’s supply of renewable energy production. Targeted reductions of GHG emissions are expected to result in the growth of renewable energy production.

GHG Emission Reduction Regulations

GHG emission reduction regulations are expected to expedite the shift in the electrical power generation mix to lower carbon sources, including natural gas and renewable generation. On August 19, 2011, the Government of Canada released its proposed federal GHG emission performance standards for coal-fired electrical power generators to be effective July 1, 2015. Such standards will apply to existing coal-fired plants after the later of their 45th year of service or the end of their PPAs, and will apply to any new coal-fired plants commissioned after July 1, 2015.

The Ontario government has introduced regulations which require mandatory GHG emissions reporting for all regulated sources that emit 25,000 tonnes of CO2e or more per year. The regulations also set limits on emissions of nitrous oxide and sulphur dioxide from electrical generating facilities that use fossil fuels. The Ontario government has also committed to closing down all of the Province’s coal-fired power plants by 2014, eight of which were shut down in 2010.

The Western Climate Initiative, comprised of seven US states and four Canadian provinces, including Ontario, has also established targets to reduce GHG emissions.

Government Incentives and Renewable Portfolio Standards

North American renewable energy growth continues to be driven by government incentives, subsidized long-term off-take agreements and various feed-in-tariff programs. Another key driver of emissions reduction, which stimulates renewable energy demand, is the introduction of RPS by various states in the United States. Thirty three states have now introduced RPS legislation which mandates that 10% to 33% of their electricity generation must be from renewable energy sources over varying periods up to 2025.

In Ontario, there is a movement towards renewable energy initiatives, which has been enabled by the Green Energy and Green Economy Act, 2009 with the implementation of the FIT Program which replaced the previous RESOP in October 2009. The RESOP and FIT Program both provide 20-year PPAs with the OPA. As at December 31, 2010, a total of 1,570 PPAs have been awarded by the OPA under the FIT Program, representing 3,565 MW of contracted renewable energy in Ontario. Under the FIT Program, proponents of newly built on-shore wind power projects receive a price of $135/MWh and proponents of solar projects receive about $420/MWh. The Ontario government has targeted new renewable capacity additions of over 9,000 MW by 2018.

The Canadian federal government has also provided support through incentives to renewable power producers. The 2007 Canadian federal budget allocated $4.5 billion to support renewable and energy incentive programs, including the ecoEnergy Program, to support the development of 4,000 MW of renewable energy investment across Canada over the next 14 years. The ecoEnergy Program was designed to encourage the production of approximately 14.3 TWh of electricity from low-impact renewable energy sources such as wind, hydro, biomass, solar and tidal energy. As part of the ecoEnergy Program, a $10 per MWh incentive is available over a ten year period for projects commissioned between April 1, 2007 and March 31, 2011.

Renewable energy investments also continue to be eligible for accelerated tax depreciation in Canada of 30% for capital qualified as Class 43.1 or 50% for capital qualified as Class 43.2.

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Ontario Regulation

The Ontario government enacted the Electricity Restructuring Act, 2004, which introduced a regulated price plan designed to ensure that prices paid by consumers more accurately reflect the prices paid to electricity generators, while avoiding the volatility that exists in wholesale electricity market prices. In late 2004, the OPA was established under the Electricity Restructuring Act, 2004, with responsibility for ensuring the adequate long-term supply of electricity resources in Ontario by reviewing demand and resource reliability forecasts, facilitating supply source investment and diversification, and promoting conservation. In August 2007, the OPA filed with the OEB a comprehensive 20 year Integrated Power System Plan identifying the conservation, generation and transmission investments required in Ontario based on the Directive from the Ontario Ministry of Energy dated June 13, 2006. The plan was not implemented and on September 17, 2008, the Ontario Minister of Energy issued a revised Directive which substantially increased the renewable power portion of the province’s generation portfolio and directed the OPA to develop the province-wide FIT Program for renewable energy.

The Ontario Minister of Energy and Infrastructure introduced Bill 150: The Green Energy and Green Economy Act, 2009 on February 23, 2009, which enacted the Green Energy Act, 2009 and amended several key pieces of energy related legislation, including the Electricity Act, 1998 and the Ontario Energy Board Act, 1998. The OPA was mandated to develop a feed-in-tariff for the procurement of renewable energy projects and renewable energy generating facilities were provided with priority access to the province’s electricity transmission and distribution grids. In September 2009, the OPA launched the FIT Program which offers a 20-year term, fixed price contract for renewable electricity production. The FIT Program is divided into two streams: projects generating more than 10 KW of electricity and projects generating 10 KW or less of electricity. To be eligible for the FIT Program, ground mounted solar (PV) projects are limited to 10 MW.

On February 24, 2011, the OPA issued a second round of FIT Program contracts for large scale projects totalling 854 MW, of which 257 MW are for solar PV projects and 615 MW are for wind power projects.

Ontario is the leading Canadian province with respect to solar PV generation as a result of the RESOP and FIT Program. The OPA has executed FIT Program contracts for an aggregate of 1,027 MW of potential solar PV generating capacity (of which 633 MW are ground mounted and 394 MW are roof top) and smaller contracts amounting to 33 MW of potential rooftop solar PV generating capacity. Prior to the FIT Program, the OPA executed a number of RESOP agreements with solar developers under the RESOP. The Sarnia RESOP Agreements were executed under this prior program.

On February 17, 2011, the Ontario Minister of Energy issued a revised Directive to the OPA, which outlines the proposed energy supply mix for the Province and which requires the OPA to submit a long-term energy plan to the OEB for review. The plan must provide for renewable sources of energy (excluding hydroelectric) to comprise approximately 10% to 15% of total electricity generation in Ontario by 2018, with a target of 9,000 MW of hydroelectric generating capacity and 10,700 MW of wind, solar and bioenergy generating capacity, to be accommodated through transmission expansion and maximizing the use of the existing grid. To accommodate the growing number of renewable energy projects, the plan must also include plans to design and build five priority transmission projects that were previously identified by the OPA. The OEB has been directed by the Minister to complete its review of the plan and issue its decision within 12 months of receiving the plan from the OPA.

In 2007, the Premier of Ontario announced a short term target of reducing GHG emissions in Ontario by six percent from 1990 levels by 2014. Ontario’s mid-term target is to achieve a 15% reduction of GHGs below 1990 levels by 2020, and its long term goal is to reduce GHG emissions by 80% below 1990 levels by 2050. On December 1, 2009, Ontario Regulation 452/09 was made under the Environmental Protection Act(Ontario), which requires mandatory GHG emissions reporting for all regulated sources that emit 25,000 tonnes of CO2e or more per year starting in 2010. On December 3, 2009, the Ontario legislature passed the Environmental Protection Amendment Act, providing the province with the ability to develop and implement an Ontario GHG emission cap-and-trade program. The Ontario government has indicated that it plans to develop a GHG emission cap-and-trade system that aligns with some of the other systems being developed in North America. Any environmental attributes, such as GHG emission credits or off-sets, that are

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generated by the Renewable Assets currently belong to the OPA pursuant to the terms of the PPAs. Following the expiration of the PPAs, it is possible that the Renewable Assets could have the potential to generate and sell GHG emission reduction credits or off-sets.

Background to the Transaction

On April 27, 2011, management of Enbridge contacted Gordon Tallman, the Chair of the Board and of the ECT Board, requesting a meeting of the Board and ECT Board, as Enbridge wished to present a proposal involving the transfer of the Renewable Assets to the Fund. The Board and ECT Board convened a joint meeting on May 2, 2011, to receive a presentation by Enbridge of its proposal that the Fund acquire the Renewable Assets for an aggregate purchase price of $1.31 billion. The Independent Directors and Independent ECT Trustees met in camera and determined to recommend to the Board and ECT Board that a joint special committee consisting of the Independent Directors and Independent ECT Trustees, who are Gordon Tallman, Catherine Best, Richard Auchinleck and Elizabeth Cannon, be constituted to consider the proposal and make a recommendation to the Board and ECT Board. The Board and ECT Board reconvened and approved the formation of the Special Committee and the mandate of the Special Committee, which includes the ability to retain independent legal, financial and other advisors, as well as other related matters. Ms. Best was appointed the Chair of the Special Committee.

In the weeks following, the Special Committee retained Macleod Dixon LLP as its legal counsel and had discussions, met with, and considered the qualifications provided by a number of financial advisory firms. In consultation with its legal advisors and taking into consideration the independence requirements imposed by applicable securities laws, on May 30, 2011 the Special Committee selected the Financial Advisor. On May 31, 2011, the Special Committee and representatives of the Financial Advisor and legal counsel met with Enbridge management and its representatives to receive a more in-depth presentation regarding the Renewable Assets and Transaction. Following the presentation, the Special Committee reviewed its duties and responsibilities with legal counsel and discussed the process for investigating the Renewable Assets, legal issues arising from the proposed transaction and the structure of the proposed transaction.

On June 9, 2011, the Special Committee and representatives of the Financial Advisor and legal counsel met to discuss process and timing matters related to the proposed transaction as well as a preliminary work plan. The Financial Advisor was directed to assist the Special Committee in identifying independent engineering firms that would have the required expertise to prepare a report on the Renewable Assets and the scope of the Financial Advisor’s responsibilities was discussed. Following a discussion with legal counsel, the Special Committee determined that a formal valuation of the Renewable Assets rather than the Fund Units to be subscribed for by the Corporation as part of the Transaction was the most appropriate course of action from a governance and valuation perspective and directed the Financial Advisor to prepare such valuation. The Special Committee further directed that an application for exemptive relief from the requirements of obtaining a formal valuation of the Fund Units pursuant to MI 61-101 be prepared subject to the determination of the final structure of the Transaction.

In the months of June, July and August 2011, the Special Committee and its advisors conducted due diligence, considered the financial models provided by Enbridge and had numerous meetings amongst themselves and with Enbridge representatives regarding financial, legal, tax, technical and other matters. The Special Committee, based on, among other things, advice from the Financial Advisor, sought and arranged for the retention of SAIC to provide independent engineering services relating to the Renewable Assets. A site visit of the Renewable Assets by representatives of the Special Committee, the Financial Advisor and SAIC occurred on July 7 and 8, 2011, at which they made general field observations of the Renewable Assets and were provided with the opportunity to meet and question operations personnel.

At a meeting of the Special Committee on July 14, 2011, the Financial Advisor provided a preliminary value analysis of the Renewable Assets, including its preliminary views and supporting analyses, which was subject to the receipt of additional information from SAIC. The Special Committee and its legal advisors then focused on negotiation of the Transaction structure, terms and conditions and proceeded with an application for an Advance Ruling Certificate pursuant to the Competition Act (Canada). On August 4, 2011, the Competition

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Bureau issued an Advance Ruling Certificate pursuant to section 102 of the Competition Act (Canada) in respect of the Transaction.

On the advice of its legal advisor, the Special Committee authorized its legal counsel to make application to the OSC for relief from the requirement in MI 61-101 to obtain a formal valuation of the Fund Units (the “Relief”), which Relief was granted on September 9, 2011.

SAIC delivered a draft of the SAIC Report to the Special Committee at a meeting held on September 1, 2011, at which meeting the Special Committee and its advisors reviewed the draft SAIC Report with a representative of SAIC.

The Financial Advisor verbally delivered the Valuation and Fairness Opinion to the Special Committee at a meeting held on September 8, 2011, which Valuation and Fairness Opinion was subsequently delivered in writing. At the meeting, the Special Committee and its advisors reviewed the Valuation and Fairness Opinion. The Special Committee held an in camera session to discuss and consider its recommendation regarding the Transaction and unanimously: (i) resolved that the Transaction is in the best interests of the Corporation, the Fund and ECT and is fair to the Corporation; and (ii) recommended to the Board that it approve the Transaction and recommend to the Shareholders the approval of the Transaction.

On September 8, 2011, the ECT Board met to consider the Valuation and Fairness Opinion, the SAIC Report and the unanimous recommendation of the Special Committee and unanimously resolved (with trustees who are directors or officers of Enbridge abstaining) to approve the Transaction for and on behalf of the Fund and approve the financing by the Fund and ECT in furtherance of the Transaction. The Board then held a meeting to consider the Valuation and Fairness Opinion, the SAIC Report and the unanimous recommendation of the Special Committee and unanimously (with directors who are directors or officers of Enbridge abstaining) resolved to approve the Transaction and the Financing and the Enbridge Financing to the extent that it involves the Corporation in furtherance of the Transaction, and recommends to Shareholders that the Transaction be approved.

SAIC Report

SAIC was retained by the Corporation and ECT on June 22, 2011 to take direction from the Special Committee and the Financial Advisor in connection with conducting an independent engineering review of each Renewable Asset’s major equipment and power production capability, historical and projected operations and maintenance costs, environmental and regulatory compliance, energy production and to identify potential technical risks. SAIC subcontracted a portion of the review associated with the Ontario and Talbot Wind Projects to DNV. The professional services agreement with SAIC provides that SAIC will be paid a fee for the preparation and delivery of the SAIC Report. SAIC is a leading scientific, engineering, systems integration and technical services company that provides energy, environmental and infrastructure solutions to U.S. government agencies and other customers in the U.S. and across the world. SAIC’s and DNV’s review addressed all aspects of the Renewable Assets, including technical, operational, maintenance, safety, environmental and human resources. SAIC and DNV were provided with the opportunity to hold discussions with site operating and management staff without restriction.

In the preparation of the SAIC Report, SAIC and DNV: (i) reviewed the operating agreements governing the Renewable Assets to determine how each supports the technical performance of the Renewable Assets; (ii) reviewed geotechnical reports and foundation designs for the Renewable Assets; (iii) gathered information from recent site visits and general observations of the Renewable Assets; (iv) reviewed the status of permits and approvals and compliance by the Renewable Assets with those permits and approvals; (v) reviewed the historic and projected operation and maintenance expenses of the Renewable Assets; (vi) reviewed historical operating records of the Renewable Assets; (vii) reviewed environmental site assessments of the sites of two of the three the Renewable Assets; and (viii) reviewed projections of electrical power generation and operation and maintenance expenses for the Renewable Assets.

In the preparation of the SAIC Report and the opinions contained therein, SAIC and DNV made certain assumptions with respect to conditions which may exist or events which may occur in the future. While SAIC

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believed these assumptions to be reasonable for the purpose of the SAIC Report, they are dependent upon future events, and actual conditions may differ from those assumed. In addition, SAIC and DNV used and relied upon certain information provided to them by sources which SAIC and DNV believe to be reliable. While SAIC and DNV believe the use of such information and assumptions to be reasonable for the purposes of the SAIC Report, SAIC and DNV offer no other assurances thereto and some assumptions may vary significantly due to unanticipated events and circumstances. The SAIC Report summarizes the work conducted by SAIC and DNV up to the date of the SAIC Report. Thus, changed conditions occurring or becoming known after such date could affect the material presented to the extent of such changes.

The following is a list of principal considerations and assumptions made by SAIC and DNV in developing the SAIC Report and the principal information provided to SAIC and DNV by others:

1. as the independent engineer, SAIC and DNV performed the review within the scope of their services, in accordance with generally accepted engineering practices. SAIC’s and DNV’s review includes such observations and analyses as SAIC and DNV, in their professional capacities, deemed necessary for their review;

2. as the independent engineer, SAIC and DNV made no determination as to the validity and enforceability of any contract, agreement, rule, or regulation applicable to the Renewable Assets and to the design, construction and operation thereof. For the purposes of the SAIC Report, SAIC and DNV assumed that all such contracts, agreements, rules, and regulations will be fully enforceable in accordance with their terms;

3. that the Renewable Assets will be operated in accordance with existing policies and procedures as reviewed during SAIC’s and DNV’s site visits;

4. that the Renewable Assets will be maintained in accordance with good engineering practices, all required renewals and replacements of equipment will be made in a timely manner, and the equipment will not be operated to cause it to exceed the equipment manufacturer’s recommended maximum ratings;

5. that qualified and competent personnel will be employed who will properly operate and maintain the Renewable Assets in accordance with the equipment manufacturers’ recommendations and generally accepted engineering practices and will generally operate the Renewable Assets in a sound and businesslike manner;

6. that inspections, overhauls, repairs, and modifications are planned for and conducted in accordance with equipment manufacturers’ recommendations, and with special regard for the need to monitor certain operating parameters to identify early signs of potential problems;

7. that no wind energy projects will be developed that impact the wind resource at the Renewable Assets;

8. that the wind turbine generators (“WTGs”) will not experience serial failure issues; and

9. that the Renewable Assets will not be curtailed.

For a complete understanding of the estimates, assumptions and calculations upon which the following conclusions are based, the SAIC Report should be read in its entirety. On the basis of SAIC’s and DNV’s review and analysis of the Renewable Assets and the assumptions set forth in the SAIC Report, SAIC and DNV concluded the following with respect to the Renewable Assets:

1. Vestas, SCL, RES Wind, Enbridge, and First Solar have respectively demonstrated the capability to operate and maintain the Renewable Assets;

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2. the Renewable Asset sites are of adequate size to support the operation and maintenance of the Renewable Assets;

3. based on Vestas’ and SCL’s previously demonstrated capability to address issues similar to those related to the WTGs described in the SAIC Report, the WTG technologies proposed for the Ontario and Talbot Wind Projects and the First Solar PV array technology utilized at the Sarnia Solar Project are sound, proven methods of electricity generation. Further, the V82 and SWT-2.3-101 wind turbines are suitable for the sites of the Ontario and Talbot Wind Projects, respectively. If operated and maintained as currently proposed, the Renewable Assets should be capable of continuing to meet the requirements of the respective PPAs and current environmental permit requirements. Further, Enbridge has adequately provided for all major off-site requirements of the Renewable Assets, including electrical interconnection;

4. provided that: (i) the Renewable Assets continue to be operated and maintained as previously demonstrated by First Solar, Enbridge, Vestas, SCL, and RES Wind; (ii) all equipment is operated in accordance with manufacturer recommendations; (iii) all required repairs and replacements are made on a timely basis; and (iv) the Sarnia Solar Project PV modules meet the provisions of the 25 year limited warranty provided by First Solar, each of the Renewable Assets should have a remaining useful life extending beyond the term of its respective PPA;

5. absent any curtailment, the Ontario Wind Project should be capable of producing an average annual net generation of 474 GWh over its remaining design life;

6. given the inherent uncertainty associated with assessing the solar resource at the Sarnia Solar Project site without high-quality on-site measured data, the Sarnia Solar Project should be capable of producing a long-term average annual net generation of 109.8 GWh;

7. absent any curtailment, based on adjusting the losses assumed in the Talbot wind resource assessment, the Talbot Wind Project should be capable of producing an average annual net generation of 283 GWh over its remaining design life;

8. the operating programs and procedures that are currently in place for the Renewable Assets are consistent with generally accepted practices in the industry;

9. assuming the Sarnia Operating Agreement is extended, the methodology used by Enbridge in preparing the O&M estimates for the Renewable Assets is reasonable and the estimated costs of operating and maintaining the Renewable Assets, including post-warranty capital expenditures for the Ontario and Talbot Wind Projects, are within the range of costs of similar facilities with which SAIC and DNV are familiar;

10. because no updated ESAs of previous or recent environmental investigations regarding the potential for site contamination issues at the sites of the Renewable Assets have been provided for SAIC’s review, SAIC can offer no opinion with respect to potential site contamination issues at the sites of the Renewable Assets, if any, or potential future remediation costs should contamination be found;

11. Enbridge has identified and obtained the key permits and approvals required for operation of the Renewable Assets; and

12. the Renewable Assets are in material compliance with the key environmental permits and approvals required from the various federal, provincial and local agencies which are currently necessary to operate.

The foregoing is a summary of the SAIC Report and is qualified in its entirety by the full text which is available for review on SEDAR at www.sedar.com.

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The Financial Advisor delivered its verbal valuation and fairness opinion to the Special Committee on September 8, 2011, which valuation and fairness opinion was subsequently confirmed in writing. Based on and subject to the analyses, assumptions, limitations and qualifications contained in the Valuation and Fairness Opinion, the Financial Advisor concluded that, as of September 8, 2011, the range of values representing the fair market value of the Renewable Assets is between $1.1 billion and $1.25 billion and that the consideration payable by ECT for the Renewable Assets pursuant to the PSPCA is fair, from a financial point of view, to ECT and the Corporation.

Engagement of Financial Advisor

The Special Committee retained the Financial Advisor to provide financial advice and related assistance to the Special Committee in evaluating the Transaction, including the preparation and delivery to the Special Committee of the Valuation and Fairness Opinion in accordance with the requirements of MI 61-101.

Pursuant to the engagement letter signed on June 23, 2011, the Financial Advisor will be paid a set fee for the delivery of a preliminary value analysis and the Valuation and Fairness Opinion. In addition, the Financial Advisor is to be reimbursed for its reasonable out-of-pocket expenses and has been jointly and severally indemnified by ECT and the Corporation for certain liabilities. The Financial Advisor was determined by the Special Committee and its counsel to be independent within the meaning of MI 61-101.


The summary of the Valuation and Fairness Opinion contained in this Circular is qualified in its entirety by reference to the full text of the Valuation and Fairness Opinion. The full text of the Valuation and Fairness Opinion, setting out the assumptions made, matters considered and limitations and qualifications on the review undertaken in connection with the Valuation and Fairness Opinion, is attached as Appendix A to this Circular.

The Valuation and Fairness Opinion was provided to the Special Committee and the Board for its exclusive use only in considering the Transaction and may not be published, disclosed to any other person, relied upon by any other person, or used for any other purpose, without the prior written consent of the Financial Advisor. The Valuation and Fairness Opinion was not intended to be or does not constitute a recommendation to the Special Committee or the Board as to whether they should approve the PSPCA or the Transaction nor as a recommendation to any Shareholder as to how to vote or act at the Meeting or as an opinion concerning the trading price or value of any securities of Enbridge, the Fund, the Corporation or ECT following the announcement or completion of the Transaction. The Valuation and Fairness Opinion was one of a number of factors taken into consideration by each of the Special Committee and the Board in making its unanimous determination that the Transaction is in the best interests of the Corporation, the Fund and ECT and fair to the Corporation, and its recommendation that Shareholders approve the Transaction.

The Special Committee and the Board urge Shareholders to read the Valuation and Fairness Opinion in its entirety. See Appendix A to this Circular.

Prior Valuations

The Corporation is not aware of any “prior valuations”, as such term is defined in MI 61-101 within the 24-month period preceding the date of this Circular.

Benefits of the Transaction

The acquisition of the Renewable Assets is consistent with the Fund’s investment objectives and strategy of acquiring assets which would provide investors with a high payout of cash and a high degree of reliability of

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income, with relatively low risk and modest growth. Completion of the Transaction is expected to provide the following benefits to the Fund, the Corporation and the Shareholders:

Incremental earnings and cash flow from energy infrastructure with a reliable, low risk business model. Each of the Renewable Assets is in operation and is generating earnings and cash flow that would immediately accrue to the Fund upon completion of the proposed Transaction. The Ontario Wind Project, Talbot Wind Project and Sarnia Solar Project all benefit from long-term, fixed price PPAs with a highly credit-worthy counterparty (the OPA) and established, long-term operating and maintenance agreements with experienced service providers. The remaining term of the existing PPAs with the OPA is not less than 17 years (after consideration of extension options granted by the OPA) which will support long-term stable cash flows from the projects.

Increased scale and diversification of the Fund’s underlying business. The Transaction would substantially grow the Fund’s renewable power business from 35 MW to over 400 MW. Upon completion of the Transaction, the asset base and cash flow generated by the green energy (renewable power generation) segment would be comparable to each of the Alliance Canada (natural gas transmission) and Saskatchewan System (crude oil and liquids transportation) businesses. This growth in the green energy business would enhance diversification of the Fund’s business mix and ongoing sources of earnings and cash flow.

Enhanced trading liquidity and better access to capital: As a result of the Transaction, the number of Common Shares held by the public is expected to increase by approximately 58%. The increase in the Corporation’s public float may result in enhanced trading liquidity which could reduce share price volatility and attract a broader range of investors. The amount of term debt issued by the Fund to the public market is also expected to increase as the term loan provided by Enbridge in connection with this Transaction is refinanced over time. This increased presence in both equity and debt capital markets should enhance the Fund’s and the Corporation’s ability to raise new capital and respond to opportunities to develop or acquire (from Enbridge or other third parties) new energy infrastructure in furtherance of its strategy.

Effect of Transaction on Shareholders

The Transaction is expected to be accretive to the Corporation’s cash flow by approximately 7.5% on a long-term basis. It is expected that following completion of the Transaction, dividends paid by the Corporation will continue to be eligible dividends pursuant to subsection 89(14) of the Tax Act which entitle Canadian-resident shareholders who are individuals to the enhanced dividend tax credit.

The Transaction will be financed in part by the Financing, which contemplates the issuance of Subscription Receipts at a price of $18.75 per Subscription Receipt for gross proceeds of $219.5 million. Assuming completion of the Transaction and the Financing, including the exchange of Subscription Receipts for Common Shares and the subscription by Enbridge for Common Shares, an additional 14,616,000 Common Shares would be issued, which would increase the outstanding share capital of the Corporation to 39,741,000 Common Shares. Enbridge will continue to own 19.9% of the issued and outstanding Common Shares.

Recommendation of the Joint Special Committee and the Board

The Special Committee was formed to review the Transaction, including the related party transactions, and to report to the Board regarding its recommendations and conclusions. The Special Committee retained independent legal, financial and technical advisors to assist in the review process and the Financial Advisor was engaged to provide the Valuation and Fairness Opinion. During the course of its deliberations and in arriving at its recommendation, the Special Committee reviewed, considered and discussed technical, financial, tax and legal issues as well as other matters in connection with the various steps contemplated in the Transaction and the PSPCA, including the related party transactions. It also obtained tax and legal advice regarding requirements under MI 61-101, the Competition Act (Canada) and other applicable legislation.

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The Special Committee concluded that the Transaction is in the best interests of the Corporation, the Fund and ECT and is fair to the Corporation. Accordingly, the Special Committee unanimously recommended to the Board that it approve the Transaction and recommend approval of the Transaction by the Shareholders.

The Board considered the Valuation and Fairness Opinion, the SAIC Report and the recommendation of the Special Committee, as well as other factors and considerations relating to the Renewable Assets and Transaction, including but not limited to:

(a) information concerning the business, operations, property, assets, financial condition, operating results and prospects of each of the Renewable Assets;

(b) historical information and industry forecasts regarding the wind and solar resources in the areas where the Renewable Assets are situated;

(c) material agreements affecting the Renewable Assets, and in particular the respective long term power purchase agreements;

(d) current and prospective industry, economic and market conditions and trends affecting the Renewable Assets and the energy and renewable energy sectors;

(e) the expected growth, diversification and financial growth benefits of the Transaction to the Fund and its business, and to the Corporation as a holder of Fund Units; and

(f) the risks associated with completion of the Transaction and the risks associated with not completing the Transaction.

The Board unanimously (with directors who are directors or officers of Enbridge abstaining) concluded that the Transaction is in the best interests of the Corporation, the Fund and ECT and fair to the Corporation, resolved to approve the Transaction and the PSPCA and recommends the approval of the Transaction by Disinterested Shareholders.

Approval of the Transaction

Pursuant to MI 61-101, certain of the steps contemplated in the Transaction, including the subscription and purchase of the Fund Units by the Corporation and the issuance of Common Shares to Enbridge, constitute “related party transactions”. As such, the Corporation cannot proceed with such transactions until it has received the approval of a majority of the Disinterested Shareholders. The Board recommends that the Disinterested Shareholders vote in favour of the Resolution set forth below.

To the knowledge of the Corporation, after reasonable inquiry, the only persons whose votes should be excluded in determining Disinterested Shareholder approval of the Transaction are listed in the table below. The information as to the Common Shares beneficially owned or over which control or direction is exercised, not being within the knowledge of the Corporation, has been furnished by Enbridge and the individuals listed below who are directors or officers of any of EPI, ERIC, 1682399, Talbot GP or the Manager and is effective as of September 9, 2011.

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Name Number of Common SharesEnbridge Inc. 5,000,000J. Richard Bird 110,000J. Lorne Braithwaite 11,365David W. Bryson 1,943Patrick D. Daniel 15,000Charles W. Fischer 10,000Leo J. Golden 1,700Colin K. Gruending 3,174Walter Kresic 1,100Alison T. Love 385Art D. Meyer 5,000Al Monaco 8,150Wanda Opheim 16,627John K. Whelen 2,500Stephen J. Wuori 5,000Leon A. Zupan 1,000Total 5,192,944

Form of Resolution

Disinterested Shareholders will be asked to consider, and if deemed advisable, approve the following ordinary resolution:

“BE IT RESOLVED THAT the acquisition by indirect wholly-owned subsidiaries of the Fund of interests in entities that own the Renewable Assets currently owned either directly by Enbridge or indirectly by wholly-owned subsidiaries of Enbridge, pursuant to the Purchase, Subscription and Purchase for Cancellation Agreement dated September 8, 2011, and the completion of all of the transactions contemplated thereby and necessary or advisable in connection therewith, including, the subscription and purchase by the Corporation of Fund Units and the issuance and sale by the Corporation of Common Shares to Enbridge, be and is hereby approved, ratified and confirmed.”

Approval of the Resolution requires the affirmative vote of a majority of the votes cast in respect thereof by Disinterested Shareholders represented at the Meeting. The persons designated in the enclosed form of proxy, unless instructed otherwise, intend to vote in favour of the Resolution.

POST CLOSING MATTERS

Corporate Structure

The following diagram illustrates the ownership of the Renewable Assets, which are shaded, within the corporate structure of the Corporation and the Fund, assuming completion of the Transaction.

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Management

There will be no change in the operations and day to day management of the Renewable Assets, which will continue to be operated by affiliates of Enbridge in the same manner as prior to completion of the

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Transaction. The Manager, Enbridge and the Services Recipients will enter into the EMSI Services Agreement, pursuant to which Enbridge or affiliates, under the direction of the Manager, will provide the Services Recipients with management and other operational services required to operate and administer the businesses of the Services Recipients. Such services will include things such as: meeting external reporting requirements, providing strategic operational oversight and management, ensuring appropriate staffing and resources are available, preparing financial reports and budgets, overseeing all field duties, ensuring proper training and monitoring the operation of all the electrical infrastructure. Under the EMSI Services Agreement, the Services Recipients will pay Enbridge $1,500,000 annually for such services and will reimburse Enbridge for all operating costs and expenses reasonably incurred by it as well as for all out-of-pocket expenses. The EMSI Services Agreement will have a five year term, unless terminated earlier in accordance with its terms, and may be renewed at the option of the Services Manager and the Services Recipients.

Repayment of Fund Indebtedness

Subject to market conditions, it is anticipated that the Fund may use its medium term note offering program to repay some or a portion of the $655 million loan owed to Enbridge.

Expenses of the Transaction

All of the costs incurred by the Corporation associated with the Transaction, excluding those costs associated with the Financing and the issuance of Common Shares to Enbridge, will be borne by ECT pursuant to its reimbursement agreement with the Corporation. All of the costs incurred by the Corporation associated with the Financing and the issuance of Common Shares to Enbridge will be borne by the Fund pursuant to an assistance agreement under which the Fund will agree to pay an amount to the Corporation equal to and in respect of all such costs in consideration of the Corporation agreeing to apply all proceeds raised by the Corporation from issuing its common equity to subscribe for Fund Units. The estimated costs, excluding the Financing related costs, but including without limitation, financial, tax, engineering, accounting, legal and other advisory fees and disbursements, costs associated with the preparation, printing and mailing of this Circular and other related documents and agreements, are expected to be approximately $3.6 million. The estimated Financing costs, including without limitation, accounting, legal, audit, listing and filing fees, underwriters’ commissions, printing or other costs associated with the Financing and the issuance of Common Shares to Enbridge, the TSX listing fees for the Subscription Receipts and Common Shares to be issued in exchange for the Subscription Receipts and to Enbridge are expected to be approximately $9.3 million.

RISK FACTORS

In addition to the risk factors relating to the businesses carried on by the Fund and its subsidiaries, the energy infrastructure industry and to the Corporation as a holder of Fund Units, as set forth in the AIF and which are incorporated in this Circular by reference, consideration should also be given to the risk factors discussed below, which pertain specifically to the Transaction, the Renewable Assets and their ownership by the Fund, as well as the Shareholders’ investment in the Corporation.

Risks Related to Completion of Transaction

Conditions to Closing

There is no certainty that the Corporation, the Fund and/or Enbridge will be able to satisfy or obtain waiver of any of the conditions to closing of the Transaction or if such conditions will be satisfied or waived in a timely manner. If the Corporation is unable to close the Financing because of unfavourable market conditions or otherwise, the Corporation will not have the funds to acquire additional Fund Units, and ultimately, the funds necessary to acquire the Renewable Assets. Further, consents or approvals of third parties are required at law, by contract or pursuant to the PSPCA as a condition to completion of the Transaction. The failure to satisfy or obtain waiver of any of the conditions could result in undue delay or the failure to complete the Transaction as contemplated, or at all.

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Impact on Dividends and Share Price

The Corporation, the Fund and ECT are required to pay the costs and expenses relating to the Transaction and related matters whether or not the Transaction is completed. Such costs and expenses are significant and may have an impact on the ECT distributions if the Transaction fails to close and available funds are used to pay such costs and expenses. See “Post Closing Matters – Expenses of the Transaction”. A reduction in the amount of the ECT distributions will result in a corresponding reduction in the amount of the distributions by the Fund on the Fund Units, which will in turn result in a reduction in the amount available to the Corporation to distribute by dividend. Further, a reduction in the dividend payable on the Common Shares may have a negative impact on the trading price of the Common Shares.

Risks Relating to the Business of the Renewable Assets

Changes in Solar and Wind Conditions

The revenues generated by the Renewable Assets are directly related to the amount of electricity generated by the Renewable Assets which in turn is highly dependent upon weather and atmospheric conditions. While the expected energy yields for the Renewable Assets are predicted using historical data, solar and wind resources will be subject to natural variation from year to year and from season to season. Conditions may also change permanently because of climate change or other factors. A sustained decline in solar or wind resources at any of the Renewable Assets facilities could lead to a material adverse change in the volume of electricity generated and thereby have a negative impact on revenues and cash flows from such facility.

Performance of Counterparties and Contract Expiry

All of the power delivered by the Renewable Assets has been sold under long-term PPAs with the OPA. If for any reason the OPA is unable or unwilling to fulfill its contractual obligations under any or all of the PPAs such as paying the specified PPA price for energy delivered or if it refuses to accept delivery of some or all of the electrical power contracted pursuant to a PPA, the Fund’s business, financial condition, results of operations and cash flow could be materially and adversely affected if the Fund is unable to replace such PPA with another PPA on equivalent terms and conditions. The PPAs may be subject to termination or cancellation under certain circumstances. If a PPA expires or is terminated, it is possible that the price obtained for power generated under subsequent arrangements may be reduced significantly or that subsequent PPAs will not be available at prices that permit the continued operation of the Renewable Assets on a profitable basis. In such event, the Renewable Assets may temporarily or permanently cease operations.

Equipment Performance and Failure

Some or all of the equipment comprising the Renewable Assets may not continue to perform as it has in the past. While solar panels will degrade over time, the efficiency of wind turbines may also be expected to reduce in the longer term. If actual degradation of solar panels or efficiency of wind turbines was higher than anticipated during project development, the net production and cash flow from the Renewable Assets will be reduced. There is also a risk of equipment failure due to wear and tear, latent defect, design error or operator error, among other things, which could have a material adverse effect on the Fund’s results of operations and cash flow if not remedied or if it continues for a prolonged or sustained basis.

Local Public Opposition

The development and operation of renewable assets may at times be subject to public opposition. With respect to the development and operation of wind projects, public concerns and objections often centre around the noise generated by wind turbines and the impact such turbines have on wildlife, including birds and bats. With respect to the development and operation of solar projects, public concerns and objections often relate to the loss of use of agricultural lands, the loss of habitat for wildlife, and impacts to species at risk. While public opposition is usually of greatest concern during the development stage of renewable assets, which is when the public has the ability to provide comments and appeal regulatory permits, continued

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opposition could have an impact on operations. Legal requirements, changes in scientific knowledge and public complaints regarding issues such as noise generated by wind turbines could impact the operation of certain of the Renewable Assets in the future.

Curtailment of Renewable Generators

Renewable generators are classified as “intermittent” generators under the IESO Market Rules, thereby allowing the delivery of electrical energy to the transmission and distribution grid as it is produced regardless of the prevailing power price. The IESO is, however, contemplating changes to the IESO Market Rules which would allow the IESO to curtail intermittent generators during periods of surplus base load generation when the prevailing power price falls below a threshold. Surplus base load generation occurs when power demand falls below the power supplied by the base load supply pool. The significant reduction in Ontario’s electricity demand stemming from the recent recession has, at times, dropped power demand below the base load supply. Ontario’s intermittent generators, including Enbridge, are in discussions with the OPA regarding the rights and obligations of renewable generators under their PPAs with the OPA, and the potential for these generators to receive compensation during periods of economic curtailment. Enbridge has assessed its risk of curtailment without compensation and takes the position that there is strong legal right to compensation in the PPAs. Therefore, based on current circumstances, Enbridge expects a resolution of compensation issues without material financial impact to the Renewable Assets. However, the outcome of this issue is still uncertain and is subject to potential changes in government policy or dispute resolution procedures.

Governmental Permits

The operators of the Renewable Assets are required to comply with numerous federal, provincial and local laws and regulations and to maintain and comply with numerous regulatory licenses, permits and governmental approvals required for the maintenance and operation of the Renewable Assets. Many of the regulatory permits that have been issued in respect of the Renewable Assets contain terms, conditions and restrictions, or may have limited terms. A failure to satisfy the terms and conditions or comply with the restrictions imposed under regulatory permits or the restrictions imposed by any statutory or regulatory requirements, may result in regulatory enforcement action, which could adversely affect continued operations, or result in fines, penalties or additional costs, including requirements to suspend or cease operations. In addition, all necessary permits required for the continued operation or further development of the Renewable Assets may not be maintained or renewed, which may have the effect of limiting or suspending the operation or development of the Renewable Assets and which could have a material adverse effect on the Corporation’s ability to pay dividends.

Availability of Transmission Systems

The Fund’s ability to deliver electricity is affected by the availability of the various transmission and distributions systems in the areas in which it operates. The failure of existing transmission or distribution facilities or the lack of adequate transmission or distribution capacity could have a material adverse effect on the Fund’s ability to deliver electricity to the local electricity distribution system (in the case of the Sarnia Project) or the IESO-controlled grid (in the case of the Talbot Wind Project and the Ontario Wind Power Project) and receive payment under the PPAs.

Electricity from the Talbot Wind Project is delivered to the transmission grid for purchase under the Talbot PPA through a single step up transformer. Similarly, electricity from the Kincardine Wind Farm is delivered to two transmission systems through a step up transformer for each transmission system. As a result, the transformer represents a single point of vulnerability and could experience a catastrophic failure that causes a temporary shutdown of the facility until the transformer is repaired or a replacement transformer can be found or manufactured. If the reason for a shutdown is outside of the control of the operator, a force majeure claim may be available to the Fund for temporary relief of its obligations under the PPA and other contracts. Mitigation may also be available through business interruption insurance policies or maintenance and debt service reserves to prevent a default or reduce monetary losses under such contracts. However, a force majeure claim may be challenged by the contract counterparty and, to the extent the challenge is successful,

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the outage may have a materially adverse effect on cash flows or the financial condition of the Fund and therefore could impact distributions and dividends payable by the Corporation.

Regulatory Regime

The operation of the Renewable Assets is subject to extensive regulation by various government departments and regulatory agencies, including environmental and safety standards and regulations. As legal requirements may change, any new law or regulation or changes to existing laws could require additional expenditures to achieve or maintain compliance. The profitability of the Renewable Assets will in part be dependent upon the continuation of a favourable regulatory framework. Any changes in the regulatory framework which adversely affects the Renewable Assets, including increases in taxes, permit fees or regulatory requirements may adversely affect the cash available for distribution by the Fund, which would affect the resources available to the Corporation to pay dividends. The failure to operate the Renewable Assets in strict compliance with applicable regulations and standards may expose the facilities to claims, penalties, remediation and clean-up costs, suspension or revocation of operating permits or termination of PPAs or the payment of ERPI. Further, changes in wholesale market structures or rules, such as forced curtailment without economic compensation, could have a material adverse affect on the Fund’s ability to generate revenues from the Renewable Assets, which could have a material adverse affect on the ability of the Corporation to pay dividends.

The development and operation of renewable energy sources in Ontario remains highly dependent on supportive governmental policies. The cost of renewable energy to purchasers and the economic return on renewable energy generating facilities is often dependent on the level of incentives available. The availability of such incentives is uncertain. In particular, Ontario will have a provincial election on October 6, 2011 and incentives for renewable energy as well as the price of retail electricity are expected to be central issues in the election. It is possible that a new government will not support the existing incentives for renewable energy or will take measures to fundamentally alter the energy sector and available incentives in Ontario. The terms of existing PPAs will likely continue to be respected however.

Federal Government Incentives

The Renewable Assets are able to obtain an incentive of up to $10 per MWh of electricity delivered over a 10 year period pursuant to contribution agreements under the ecoEnergy Program. If there is a change in federal government policy such that the government is unable or unwilling to fulfill its obligation under the ecoEnergy Program, this will affect the cash available for distribution to the Fund.

Certain of the Renewable Assets are Subject to Transfer Restrictions

The PPAs governing the Talbot Wind Project and the Ontario Wind Project contain provisions which may prohibit any sale, pledge, transfer, assignment or other conveyance of the owner’s interest without the consent of the OPA. These restrictions may limit or prevent the Fund from managing its interests in the Renewable Assets and may have an adverse effect on its ability to sell its interests in the Renewable Assets.

Insurance Limits

While the Fund intends to maintain insurance coverage on the Renewable Assets, such insurance may not continue to be offered on an economically feasible basis and may not cover all events that could give rise to a loss or claim involving the Renewable Assets or operations. If insurance coverage is not adequate and it is forced to bear such losses or claims, the Corporation’s ability to pay dividends could be materially and adversely affected.

Competition

In addition to wind and solar, there are many other technologies that produce electric power, including fossil fuel power plants, nuclear plants, hydroelectric plants, fuel cells and micro turbines. All of these energy

44

sources compete directly with the Renewable Assets business and certain of these technologies produce power at significantly lower costs than energy produced by the Renewable Assets. Market conditions, government programs and incentives, as well as general acceptance of energy sourced from alternative and renewable technologies have a significant impact on the renewable energy industry. Although these factors are not expected to significantly impact the Renewable Assets while the PPAs are in effect, they will have a significant impact upon expiry or termination of the PPAs. Ongoing research and development activities to seek improvements in cost and efficiencies of renewable and alternative energy technologies, as well as to address environmental concerns regarding fossil fuels, may have an impact on the Renewable Assets, particularly when the PPAs expire or terminate.

INTEREST OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON

There is no material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, by any Director or executive officer of the Corporation or any associate or affiliate of such persons, in any matter to be acted upon.

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

The only material interest, direct or indirect, of any director or executive officer of the Corporation or of a Person that beneficially owns, or controls or directs, directly or indirectly, more than 10% of the Common Shares and of any associate or affiliate of the foregoing, in any transaction since the commencement of the Corporation’s most recently completed financial year or in any proposed transaction which has materially affected or would materially affect the Corporation or any of its subsidiaries, is as follows:

1. Enbridge, a principal Shareholder as well as a holder of Fund Units and ECT Preferred Units exchangeable for Fund Units, is the indirect owner of all of the interests in entities which own the Renewable Assets. Further, the Renewable Assets are, and following completion of the Transaction will continue to be, operated and managed by subsidiaries or affiliates of Enbridge.

2. The Manager, a wholly-owned subsidiary of Enbridge, is responsible for providing management and administrative services to the Corporation, the Fund and ECT, and will receive compensation from the Fund and ECT for such services. See the Fund AIF and financial statements filed on SEDAR at www.sedar.com for disclosure of amounts paid to the Manager. At closing, the Manager will enter into the EMSI Services Agreement for the management and administration of the Renewable Assets. See “Post Closing Matters – Management”.

3. Pursuant to an agreement between ECT and the Fund and an agreement between ECT and the Corporation, ECT has agreed to reimburse the Fund and the Corporation in respect of certain costs and expenses of the Transaction. Pursuant to an assistance agreement between the Fund and the Corporation, the Fund has agreed to pay an amount to the Corporation equal to and in respect of the costs incurred by the Corporation in connection with the Financing and the concurrent issuance of Common Shares to Enbridge in consideration of the Corporation agreeing to use all proceeds from the Financing and the concurrent issuance of Common Shares to Enbridge to subscribe for Fund Units. See “Post Closing Matters – Expenses of the Transaction”.

4. Enbridge has the right to exchange, at its option, some or all of the ECT Preferred Units for Fund Units on a one for one basis, subject to adjustment in respect of anti-dilution and economic equivalence. See “Material Contracts – Exchange Right Support Agreement” in the AIF.

5. The Fund Trust Indenture was amended on December 17, 2010 to provide the Corporation and Enbridge with identical pre-emptive rights to acquire any Fund Units proposed to be issued by the

45

Fund in proportion to their respective pre-issuance economic interest in the Fund, inclusive in the case of Enbridge, of the ECT Preferred Units held by Enbridge.

6. Alliance Pipeline Limited Partnership has contracts with shippers who are also affiliates of the Fund through common ownership interests of Enbridge. The Fund’s share of Alliance Pipeline Limited Partnership’s revenue from affiliates for the year ended December 31, 2010 is $16.0 million (2009 -$13.3 million). The terms of these contracts are the same as those agreed to with independent third parties.

7. Administrative and operation services agreements allow for Alliance Pipeline Limited Partnership to provide services to Alliance Pipeline L.P., an entity related to Alliance Pipeline Limited Partnership by virtue of common ownership interests and indirectly owned by Enbridge, in exchange for reimbursement of incurred costs or at rates consistent with those obtainable from independent third parties. The Fund’s share of amounts charged to Alliance Pipeline L.P. during the year ended December 31, 2010 was $15.0 million (2009 - $14.1 million).

8. The Saskatchewan System does not have any employees and uses the services of ESOSI, which is wholly-owned by Enbridge, for managing and operating the business. See “Fund Trustees, Audit Committee and Management – Management Agreements – Saskatchewan Agreement” in the Management Information Circular of the Corporation dated March 9, 2011.

EXPERTS

PricewaterhouseCoopers LLP, Chartered Accountants (the auditors of the Corporation) provided the Auditor’s Report dated September 1, 2011 on the combined financial statements of the Renewable Entities which own the Renewable Assets as of December 31, 2010 and has advised that it is independent with respect to the Corporation within the meaning of the Rules of Professional Conduct of the Institute of Chartered Accountants of Alberta.

CIBC World Markets Inc., the Financial Advisor prepared the Valuation and Fairness Opinion dated September 8, 2011.

SAIC, the independent engineer, has provided the SAIC Report dated September 13, 2011. Certain portions of the SAIC Report were prepared by DNV. As of the date of the SAIC Report, the designated professionals of SAIC and DNV, as a group, owned beneficially, directly or indirectly, less than 1% of the outstanding Common Shares. SAIC and DNV neither received nor will receive any interest, direct or indirect, in any securities of the Corporation or its affiliates in connection with the preparation of the SAIC Report.

OTHER BUSINESS

Management is not aware of any other business to come before the Meeting other than the matters referred to in the Notice of Meeting. However, if any other matter properly comes before the Meeting, the accompanying form of proxy confers discretionary authority to vote with respect to amendments or variations to matters identified in the Notice of Meeting and with respect to other matters that may properly come before the Meeting.

ADDITIONAL INFORMATION

Additional information relating to the Corporation is available on SEDAR at www.sedar.com or on the Corporation’s website at www.enbridgeincomefund.com. Financial information is provided in the Corporation’s annual financial statements and Management’s Discussion & Analysis for the year ended

46

December 31, 2010, copies of which are filed on SEDAR and can be obtained by contacting Investor Relations at Enbridge Inc by: mail at 3000, 425 – 1st Street S.W., Calgary, Alberta, Canada, T2P 3L8; telephone at 1-800-481-2804; and email through the Corporation’s website under the heading “Contact Us –Investor Kit”. Upon request, the Corporation will promptly provide a copy of any document expressly incorporated by reference in this Circular to a securityholder of the Corporation free of charge.

APPROVAL

The contents and sending of this Circular has been approved by the Board of Directors of the Corporation.

A-1

APPENDIX ACIBC VALUATION AND FAIRNESS OPINION

CIBC World Markets Inc. Brookfield Place, 161 Bay Street, 6th floor Toronto, Ontario M5J 2S8

Tel: (416) 594-7000

September 8, 2011

Joint Special Committee of the Board of Trustees of Enbridge Commercial Trust and the Board of Directors of Enbridge Income Fund Holdings Inc. 3000 Fifth Avenue Place 425 – 1st Street SW Calgary, AB T2P 3L8

Dear Madames and Sirs:

CIBC World Markets Inc. (“CIBC” or “we”) understands that Enbridge Commercial Trust (“ECT”), a wholly owned subsidiary of Enbridge Income Fund (“EIF” or “the Fund”), and Enbridge Inc. (“Enbridge”) are proposing to enter into a transaction (the “Proposed Transaction”) involving the acquisition by one or more indirectly wholly-owned subsidiaries of EIF of the 190 MW Enbridge Ontario wind project located at Kincardine, Ontario (“EOWP”), the 99 MW Talbot wind project located near Chatham, Ontario (“Talbot”) and the 80 MW Sarnia Solar facility (“Sarnia”, and together with EOWP and Talbot, such assets being referred to herein as the “Renewable Assets”). The Proposed Transaction will be effected pursuant to the terms of a Purchase, Subscription and Purchase for Cancellation Agreement (“PSPCA”) to be entered into among Enbridge, Talbot Windfarm LP, Enbridge Renewable Energy Infrastructure Limited Partnership and Enbridge Pipelines Inc., on the one hand, and Enbridge Income Partners LP, Enbridge Pipelines (Saskatchewan) Inc., Enbridge Pipelines (Westspur) Inc., Enbridge Pipelines (Weyburn) Inc., and Enbridge Income Partners Holdings Inc., on the other hand. Enbridge Income Fund Holdings Inc. (“EIFH”, and together with ECT, the “Company” or “you”) will use the proceeds of the Public Equity Financing (as defined herein) to finance the acquisition of ordinary trust units of the Fund (“Fund Units”). We understand that the Board of Trustees of ECT and the Board of Directors of EIFH (together the “Boards”) have appointed a Joint Special Committee of the Boards (the “Special Committee”) comprised of independent trustees and independent directors to consider and evaluate the terms of any Proposed Transaction and to report thereon to the Boards.

We further understand that:

(a) ECT will indirectly acquire interests in entities that own the Renewable Assets for approximately $1,230 million (the "Purchase Price") by way of:

(i) a wholly-owned indirect subsidiary of ECT acquiring from a wholly-owned indirect subsidiary of Enbridge all of the outstanding shares of the general partners of the limited partnerships that hold the Renewable Assets;

2

(ii) wholly-owned indirect subsidiaries of ECT subscribing for and purchasing limited partnership units of the limited partnerships that hold the Renewable Assets;

(iii) limited partnerships that hold the Renewable Assets repurchasing for cancellation all of the limited partnership interests currently held indirectly by Enbridge, such that ECT will indirectly be the sole owner of the limited partnerships that own the Renewable Assets and the general partners that manage such limited partnerships;

(b) the Company will issue subscription receipts (the "Subscription Receipts") to the public pursuant to a bought deal offering for aggregate gross proceeds of not less than $219.5 million (the "Public Equity Financing") at an issue price, before commissions and expenses related to such offering, of not less than $18.75 (the "Public Equity Issue Price") per Subscription Receipt and such Subscription Receipts will be exchangeable into common shares in the capital of the Company ("Common Shares") on a one for one basis immediately prior to the closing of the Proposed Transaction;

(c) concurrent with the Public Equity Financing, the Company will issue Common Shares to Enbridge on a private placement basis for aggregate gross proceeds of approximately $54.5 million (such that Enbridge will retain its 19.9% interest in the Company) at the Public Equity Issue Price;

(d) for the purpose of providing the Company sufficient funds to acquire a number of ordinary units of the Fund ("Fund Units") equal to the number of Common Shares (on a fully-diluted basis) that are being issued by the Company in connection with the Proposed Transaction, the Company and the Fund will enter into a letter agreement in which the Fund will make a payment to the Company of an amount equal to the costs and expenses to be incurred by the Company in connection with the issuance by the Company of the Subscription Receipts and Common Shares, in consideration of the Company applying all of the proceeds received by it pursuant to its said issuance of Common Shares and Subscription Receipts to subscribe for Fund Units;

(e) the Fund will issue to the Company Fund Units at a price per Fund Unit equal to the Public Equity Issue Price for aggregate gross proceeds of approximately $274 million;

(f) the Fund will borrow $655 million from Enbridge on the basis of an unsecured subordinated loan (the "Bridge Loan") that has a 10-year maturity, that will accrue interest at the rate of 6.0% per annum payable semi-annually on May 31 and November 30 of each year and will be repayable at any time, in whole or in part, without penalty and we understand that the Fund expects to refinance the Bridge Loan at a later date through the issuance of debt securities in the bond market;

(g) ECT will issue to the Fund common trust units in ECT (the "ECT Common Units") at a price per ECT Common Unit equal to the Public Equity Issue Price for aggregate gross proceeds of approximately $929 million, being the gross proceeds to be received by the Fund from the issuance of Fund Units to the Company and the Bridge Loan;

3

(h) ECT will issue to Enbridge preferred trust units in ECT (the "ECT Preferred Units") at a price per ECT Preferred Unit equal to the Public Equity Issue Price for aggregate gross proceeds of $301 million, such ECT Preferred Units being exchangeable into Fund Units on a one for one basis and having a redemption value per ECT Preferred Unit equal to the Public Equity Issue Price and a maturity date of June 30, 2033;

(i) ECT will use the aggregate gross proceeds of approximately $929 million received from the Fund (from the issuance of ECT Common Units) and the aggregate gross proceeds of $301 million received from Enbridge (from the issuance of ECT Preferred Units) (collectively, such proceeds being referred to herein as the “Consideration”) to finance the Purchase Price and consummate the Proposed Transaction;

(j) you have advised us that the Proposed Transaction would constitute a “related party transaction” for purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Proposed Transactions (“MI 61-101”) and that the Special Committee has determined that although a formal valuation of the Renewable Assets is not required pursuant to MI 61-101, a formal valuation of the Renewable Assets rather than of the Fund Units to be subscribed for by the Company as part of the Proposed Transaction was the most appropriate course of action from a governance and valuation perspective and that it is expected that the Ontario Securities Commission, on behalf of itself and the securities regulatory authority in the Province of Québec, would be granting relief from the requirement to provide a formal valuation of the Fund Units to the shareholders of the Company;

(k) the completion of the Proposed Transaction will be conditional upon, among other things, approval by a majority of the votes cast by disinterested shareholders of EIFH who are present in person or represented by proxy at the special meeting (the “Special Meeting”) of such shareholders; and

(l) the material terms and conditions and risks associated with the Proposed Transaction will be described in a management information circular (the “Circular”) that will prepared by the Company in compliance of applicable laws, regulations, policies and rules and will be mailed to the shareholders of EIFH in connection with the Special Meeting to be convened on October 17, 2011.

All dollar amounts herein are expressed in Canadian dollars, unless stated otherwise.

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Engagement of CIBC

By letter agreement dated June 23, 2011 (the “Engagement Agreement”), the Special Committee retained CIBC to provide financial advice and related assistance to the Special Committee in evaluating the Proposed Transaction, including the preparation and delivery to the Special Committee of a formal valuation of the Renewable Assets (the "Valuation") in accordance with the requirements of MI 61-101. Pursuant to the Engagement Agreement, CIBC is providing a written opinion (the “Fairness Opinion”) as to whether the Consideration payable by ECT for the Renewable Assets pursuant to the PSPCA is fair, from a financial point of view, to ECT and EIFH.

The Engagement Agreement provides for the payment of a fee to CIBC for the preparation and delivery to the Special Committee of the Valuation and Fairness Opinion. None of the fees payable to us under the Engagement Agreement are contingent upon the conclusions reached by us in the Valuation or the Fairness Opinion, or upon the completion of the Proposed Transaction. In addition, the Company has agreed to reimburse CIBC for its reasonable expenses and to indemnify CIBC in respect of certain liabilities that might arise out of its engagement. The fees payable to CIBC pursuant to the Engagement Agreement are not financially material to CIBC. No understandings or agreements exist between CIBC, EIFH and / or Enbridge with respect to future financial advisory or investment banking business.

Credentials of CIBC

CIBC is one of Canada’s largest investment banking firms with operations in all facets of corporate and government finance, mergers and acquisitions, equity and fixed income sales and trading, and investment research. The Valuation and the Fairness Opinion expressed herein is the opinion of CIBC, and the form and content hereof have been approved for release by a committee of its managing directors and internal counsel, each of whom is experienced in merger, acquisition, divestiture and valuation matters.

Relationships with Interested Parties

CIBC acts as a trader and dealer, both as principal and agent, in major financial markets and, as such, may have had and may in the future have positions in the securities of EIFH or Enbridge their respective associates or affiliates and, from time to time, may have executed or may execute transactions on behalf of such companies or clients for which it received or may receive compensation. As an investment dealer, CIBC conducts research on securities and may, in the ordinary course of its business, provide research reports and investment advice to its clients on investment matters, including with respect to the Fund, the Company, Enbridge or the Proposed Transaction.

We confirm that:

(a) none of CIBC or its affiliated entities is an “issuer insider”, “associated entity” or an “affiliated entity” of EIFH, ECT, EIF or Enbridge;

(b) none of CIBC or its affiliated entities are acting as a financial advisor to EIFH, ECT, EIF or Enbridge in connection with the Proposed Transaction;

(c) CIBC’s compensation under the Engagement Agreement does not depend in whole or in part on the conclusion reached in the Valuation or the Fairness Opinion or the outcome of the Proposed Transaction;

(d) none of CIBC or its affiliated entities is a manager or co-manager of any soliciting dealer group formed by EIFH, ECT, EIF or Enbridge in connection with the Proposed Transaction nor will CIBC or its affiliated entities, as a member of any such group,

5

perform services beyond the customary soliciting dealer’s functions nor will CIBC or its affiliated entities receive more than the per security or per securityholder fee payable to other members of the group, if any; and

(e) none of CIBC or its affiliated entities has any material financial interest in the completion of the Proposed Transaction.

Scope of Review

In connection with our preparation of the Valuation and the Fairness Opinion, we have reviewed and, where we deemed appropriate, relied upon, among other things, the following:

i) a draft of the PSPCA dated September 8, 2011;

ii) site visits by representatives of CIBC to the Renewable Assets conducted during the week of July 4, 2011;

iii) certain internal financial, operational, corporate and other information concerning the Renewable Assets, including financial and tax models, that were prepared and provided by Enbridge and its professional advisors;

iv) key documents relating to the Renewable Assets and the Proposed Transaction, including, among others, certain power purchase agreements, ecoEnergy agreements, operating and maintenance agreements, intercorporate services agreements, and a transaction structuring memorandum from Macleod Dixon LLP;

v) relevant project engineering documents, including solar and wind resource assessments completed by Black & Veatch Corporation (“Black & Veatch”), GENIVAR Inc. (“GENIVAR”) and Garrad Hassan Canada Inc. (“Garrad Hassan”);

vi) supplemental information supplied by Enbridge, including, among other things, technical reports, corporate documentation and presentations related to the Proposed Transaction, long-term financial projections of EIF and EIFH and additional analysis;

vii) the legal due diligence report dated September 8, 2011 in respect of the Renewable Assets, prepared by Macleod Dixon LLP exclusively for use by the Special Committee in connection with the Proposed Transaction;

viii) discussions with Macleod Dixon LLP, Enbridge and their respective representatives and advisors concerning the Renewable Assets, including discussions regarding tax structuring and other items related to the Proposed Transaction;

ix) findings of a draft independent engineering due diligence report provided by SAIC Energy, Environment & Infrastructure (“SAIC”) concerning the Renewable Assets;

x) the annual reports of the Company and EIF, including the audited financial statements and management’s discussion and analysis, for the fiscal years ended December 31, 2009 and 2010;

xi) the interim financial statements and management’s discussion and analysis of the Company and EIF for the quarter ended June 30, 2011;

xii) the annual information form of the Company and EIF dated February 1, 2011;

xiii) the Company’s management information circular dated March 9, 2011 and related exhibits;

6

xiv) certain financial information and selected financial metrics with respect to precedent transactions deemed relevant by us;

xv) selected public market trading statistics and relevant business and financial information of EIFH and other comparable publicly-traded entities;

xvi) selected reports published by equity research analysts and industry sources regarding EIFH, Enbridge and other comparable publicly-traded entities;

xvii) certain industry reports relating to the power and utilities industry generally as well as certain economic outlook reports for Canada and Ontario specifically;

xviii) certificates addressed to us, dated as of the date hereof, from two senior officers of EIFH, as to the completeness and accuracy of the Information (as defined below); and

xix) such other information, analyses, investigations and discussions as we considered necessary or appropriate in the circumstances.

In addition, we have participated in discussions with members of the senior management of Enbridge and the Company regarding the Proposed Transaction, past and current business operations, the Renewable Assets and other assets, and the Company’s and EIF’s financial condition and prospects. We have also participated in discussions with the Special Committee and with representatives of MacLeod Dixon LLP, external legal counsel to the Special Committee, McCarthy Tétrault LLP, legal counsel to Enbridge, and SAIC, independent engineers engaged by the Special Committee, regarding the Proposed Transaction, the Valuation and related matters. To the best of our knowledge, CIBC has not been denied access by the Company, EIF or Enbridge to any information materially necessary to the completion of the Valuation or the Fairness Opinion.

Assumptions and Limitations

General Assumptions

Our Valuation and our Fairness Opinion (together, the “Opinions” or “this letter”) are subject to the assumptions, qualifications and limitations set forth below.

We have not been asked to prepare and have not prepared any formal valuation or appraisal of any securities of the Company, EIF, or Enbridge or any of their respective affiliates and this letter should not be construed as such, nor have we been requested to identify, solicit, consider or develop any potential alternatives to the Proposed Transaction.

With the Special Committee’s permission, we have relied upon, and have assumed the completeness, accuracy and fair presentation of all financial and other information, data, advice, opinions and representations obtained by us from public sources, or provided to us by the Company, Enbridge or their respective affiliates or advisors, or otherwise obtained by us pursuant to our engagement, and this letter is conditional upon such completeness, accuracy and fair presentation. Without limiting the generality of the foregoing, our descriptions in this letter of the Company, EIF or Enbridge and their respective assets, including the Renewable Assets, businesses and operations are derived from information that we have obtained from the Company, EIF, Enbridge or their respective affiliates or advisors or from publicly available sources. We have not been requested to or attempted to verify independently the accuracy, completeness or fairness of presentation of any such information, data, advice, opinions and representations. We have not met separately with the independent auditors of the Company, EIF or Enbridge in connection with preparing this letter and with your permission, we have assumed the accuracy and fair presentation of, and relied upon, audited financial statements and reports of the auditors thereon of the Company and EIF and the interim unaudited financial statements of the Company and EIF.

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With respect to the historical financial data, operating and financial forecasts and budgets provided to us concerning the Renewable Assets or EIF and relied upon in our financial analyses, we have assumed that they have been reasonably prepared on a basis reflecting the most reasonable assumptions, estimates and judgments of management of the Company, EIF and Enbridge, having regard to the business, plans, taxation levels, financial condition and prospects for the Renewable Assets and EIF.

We have also assumed that all of the representations and warranties contained in the PSPCA are correct as of the date hereof and that the Proposed Transaction will be completed substantially in accordance with the terms of the PSPCA and all applicable laws and that the Circular will disclose all material facts relating to the Proposed Transaction and will satisfy all applicable legal requirements. Furthermore, we have assumed that the Public Equity Financing will be completed at a price equal to or greater than the Public Equity Issue Price.

The Company has represented to us, in a certificate of two senior officers of EIFH, dated the date hereof, among other things, that the information, data and other material (financial or otherwise) provided to us by or on behalf of the Company or its affiliates, including the written information and discussions concerning the Company and the Renewable Assets referred to above under the heading “Scope of Review” (collectively, the “Information”), are complete and correct at the date the Information was provided to us and that, since the date on which the Information was provided to us, except as disclosed to CIBC, there has been no material change, financial or otherwise, in the financial condition, assets, liabilities (contingent or otherwise), business, operations or prospects of the Company and its subsidiaries, taken as a whole, and no material change has occurred in the Information or any part thereof which would have or which would reasonably be expected to have a material effect on the Opinions.

We are not legal, tax or accounting experts and we express no opinion concerning any legal, tax or accounting matters concerning the Proposed Transaction or the sufficiency of this letter for your purposes.

Our Opinions are rendered on the basis of securities markets, economic and general business and financial conditions prevailing as at the date hereof and the conditions and prospects, financial and otherwise, of the Company, EIF, Enbridge and the Renewable Assets as they are reflected in the Information and as they were represented to us in our discussions with management of the Company, EIF, Enbridge and their respective affiliates and advisors. In our analyses and in connection with the preparation of this letter, we made numerous assumptions with respect to industry performance, general business, markets and economic conditions and other matters, many of which are beyond the control of any party involved in the Proposed Transaction.

Our Opinions are being provided to the Special Committee for its exclusive use only in considering the Proposed Transaction and may not be published, disclosed to any other person, relied upon by any other person or used for any other purpose, without the prior written consent of CIBC. This letter is not intended to be and does not constitute a recommendation to the Special Committee or Boards as to whether they should approve the PSPCA or the Proposed Transaction, nor as a recommendation to any shareholder of EIFH as to how to vote or act at the Special Meeting or as an opinion concerning the trading price or value of any securities of EIFH, the Company or Enbridge following the announcement or completion of the Proposed Transaction.

CIBC believes that its financial analyses must be considered as a whole and that selecting portions of its analyses and the factors considered by it, without considering all factors and analyses together, could create a misleading view of the process underlying this letter. The preparation of a fairness opinion and formal valuation is complex and is not necessarily

8

susceptible to partial analysis or summary description and any attempt to carry out such could lead to undue emphasis on any particular factor or analysis.

The Opinions are given as of the date hereof and, although we reserve the right to change or withdraw the Valuation and / or Fairness Opinion if we learn that any of the information that we relied upon in preparing the Opinions was inaccurate, incomplete or misleading in any material respect, we disclaim any obligation to change or withdraw the Opinions, to advise any person of any change that may come to our attention or to update the Opinions after the date of this Opinion.

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VALUATION

Overview of EIFH

EIFH’s business is comprised soley of its approximately 73% ownership interest in EIF and its objective is to pay out substantially all of the distributions it receives from EIF in the form of dividends to its shareholders. Approximately 80% of EIFH’s shares are publicly held with the remaining shares held by Enbridge.

Overview of EIF

EIF is involved in the transportation and generation of energy through its 50% interest in the Canadian segment of the Alliance Pipeline, its crude oil and liquids pipelines business in Saskatchewan and investment in green power generation facilities. The Fund’s objectives are to provide a predictable flow of distributable cash and to increase, where prudent, cash distributions per trust unit. Approximately 73% of the Fund Units are held by EIFH, with the remaining 27% of the Fund Units held by Enbridge. Enbridge also owns approximately 38 million ECT Preferred Units which are exchangeable into EIF Fund Units on a one for one basis.

Simplified Organizational Structure

Enbridge Commercial

Trust

80.1%

72.6%

19.9%

100%

EC

T P

refe

rred

Un

its

EnbridgePUBLIC

Enbridge Income Fund

Enbridge Income Fund Holdings

Inc.

Operating Entities

100%

27.4%

Enbridge Commercial

Trust

80.1%

72.6%

19.9%

100%

EC

T P

refe

rred

Un

its

EnbridgePUBLIC


Enbridge Income Fund Holdings

Inc.

Operating Entities

100%

27.4%

10

Overview of the Renewable Assets

The operational renewable power generation assets consist of two wind Renewable Assets located in Kincardine and Ridgetown, Ontario and one solar Renewable Asset located in Sarnia, Ontario. Each Renewable Asset has long-term power purchase agreements (“PPAs”) in place with the Ontario Power Authority (“OPA”) and participates in the ecoEnergy for Renewable Power Program. Additionally, each Renewable Asset has long-term operating and maintenance agreements in place. In total, these Renewable Assets have 369 MW of generation capacity.

Location

Source: Enbridge.

Sarnia

Sarnia is an 80 MW solar energy Renewable Asset located on the southern shore of Lake Huron in the city of Sarnia, Ontario. The first 20 MW (“Phase 1”) was acquired in December 2009 and the remaining 60 MW (“Phase 2”) was acquired in September 2010. Phases 1 and 2 of Sarnia began commercial operation (“COD”) in December 2009 and September 2010, respectively.

EOWP

EOWP is a 190 MW wind energy Renewable Asset comprised of the Kincardine (182 MW) and Cruickshank (8MW) wind projects and is located in the Municipality of Kincardine on the eastern shore of Lake Huron in Ontario. EOWP began commercial operation in January 2009.

Talbot

Talbot is a 99 MW wind energy project located on the northern shore of Lake Erie near Ridgetown, Ontario. Talbot began commercial operation in December 2010.

EOWP

Kincardine

Toronto

Sarnia

Ridgetown

Talbot

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Name Location Capacity

(MW) COD Energy Purchaser O&M Terms

Sarnia Sarnia, Ontario

80 December 2009 (20 MW)

September 2010 (60 MW)

OPA 20 years

10-year agreement with First Solar (option to renew for another 10 years)

EOWP Kincardine, Ontario

190 January 2009 Kincardine: OPA 20 years (option to extend to 2033)

Cruickshank: OPA 20 years

7-year, fixed price agreement with Vestas expiring in 2018

Talbot Ridgetown, Ontario

99 December 2010 OPA 20 years

5-year, fixed price agreement with Siemens (option to renew)

Valuation

General Approach to Valuation

CIBC approached the Valuation in accordance with MI 61-101, which, in the case of the Proposed Transaction, requires the valuator to make a determination as to the “Fair Market Value” of the Renewable Assets. MI 61-101 defines “Fair Market Value” as the monetary consideration that, in an open and unrestricted market, a prudent and informed buyer would pay a prudent and informed seller, each acting at arm’s length with the other and under no compulsion to act.

The Special Committee engaged SAIC to conduct an independent engineering review of the Renewable Assets. As part of SAIC’s review, the original resource and production estimates developed by Garrad Hassan (Talbot), GENIVAR (EOWP) and Black & Veatch (Sarnia) for the Renewable Assets were assessed. SAIC’s findings were incorporated into our valuation analysis by way of a sensitivity to management’s financial forecast.

Management Financial Projection and Assumptions

Our analysis is based on the financial projections of the Renewable Assets as provided by Enbridge. Forecast assumptions through 2033 included, but were not limited to, projected power production levels, power pricing for the Renewable Assets while under PPA contracts as well as post PPA pricing assumptions, and estimates of other operating and maintenance costs as well as required capital expenditures to maintain and support the operations of the Renewable Assets. CIBC discussed the forecast in detail with Enbridge management. Additionally, the power production forecasts, operating and maintenance cost assumptions and capital expenditure assumptions were reviewed during the independent engineering assessment completed by SAIC.

Valuation Methodologies Considered

CIBC considered three principal methodologies in our approach to the Valuation:

i) unlevered discounted cash flow analysis (“DCF”);

ii) precedent transactions analysis; and

iii) comparable companies trading analysis.

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DCF

Unlevered discounted cash flow (“DCF”) is a valuation method whereby unlevered free cash flows generated over a specified forecast period are discounted at a specified rate to determine the present value of unlevered future free cash flows. The present value of a terminal value, representing the value of cash flows beyond the end of the forecast period, is added to arrive at a total enterprise value (“TEV”). The discount rate utilized is a weighted average cost of capital (“WACC”) that is based on three components: the cost of equity, the cost of debt and the optimal capital structure.

The Capital Asset Pricing Model (“CAPM”) is used to estimate the cost of equity component of the WACC. CAPM generates a cost of equity by adding a risk-free rate of return to a premium that represents the financial and non-diversifiable business risk of the security in question. This premium is the product of a security’s beta (a statistical measure which reflects the extent to which a security’s returns co-vary with those of a broader market index) multiplied by a broader market risk premium (equal to the amount by which the market as a whole has yielded returns in excess of the risk-free rate). A size premium is also added to estimate the cost of equity component of WACC.

Additionally, the cost of debt is estimated by examining the current long-term market costs of debt for the company or asset in question. The optimal capital structure is a qualitative judgment as to the optimal capital structure for a company or asset in question based on a comparison to other similar companies’ or assets’ capital structures.

Precedent Transactions Analysis

The precedent transactions approach considers transaction multiples in the context of the purchase or sale of a comparable company or asset. The prices paid for similar companies and assets and the implied multiples provide a general measure of value. These multiples include a premium for control of the comparable company or asset. Similar transaction characteristics are considered in the selection of relevant precedent transactions.

Comparable Companies Trading Analysis

Comparable companies trading analysis is a relative valuation analysis that evaluates the value of a company or asset using the trading and financial metrics of other comparable companies or assets deemed to have similar characteristics.

DCF Approach

CIBC has prepared a comprehensive DCF analysis based on a financial forecast for the Renewable Assets prepared by management to assist in determining the fair market value of the Renewable Assets. We believe that the DCF approach is the most appropriate methodology to value the Renewable Assets and have appropriately considered the results of this approach against other valuation methodologies. The DCF approach is the most broadly used valuation methodology in the power generation industry due to the typical long term contractedness of revenue and operating and maintenance contracts.

Our analysis is based on the financial projections of the Renewable Assets as provided by Enbridge in addition to sensitivity scenarios based on the SAIC findings.

Production Volumes

The Enbridge energy production volumes are based on solar and wind resource assessments completed for each of the Renewable Assets by independent engineers. The Sarnia production estimates were based on an energy assessment completed by Black & Veatch and the wind resource assessments for EOWP and Talbot were completed by Garrad Hassan and GENIVAR, respectively.

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In addition, CIBC has considered SAIC’s independent engineering report commentary on the long term power generation projections for each Renewable Asset in order to develop sensitivity cases for the DCF analysis.

While each engineer’s wind and solar resource estimates were consistent with the work completed by SAIC, SAIC’s loss assumptions for the renewable wind assets resulted in wind energy production estimates approximately 6% lower than Garrad Hassan / GENIVAR’s estimates due to differing loss methodologies. The average annual net generation estimate for the renewable wind assets (Talbot and EOWP) over the remaining design life of the assets is estimated at approximately 804 GWh per year under the Garrad Hassan and GENIVAR production assumptions, and approximately 757 GWh under the SAIC production estimates. CIBC has considered and incorporated both the SAIC and Garrad Hassan / GENIVAR wind production assessments into our valuation analysis.

Both engineering assessments estimated Sarnia’s average annual net generation over the remaining design life of the asset to be approximately 110 GWh over the forecast period. Both SAIC and Black & Veatch each forecasted declining production over the period due to solar panel degradation. CIBC has considered and incorporated the SAIC / Black & Veatch solar production assessments into our valuation analysis.

Electricity Prices – During the life of the Power Purchase Agreement

The price per MWh that is received for the electricity that the Renewable Assets generate is contracted under 20 Year PPAs with the Ontario Power Authority (“OPA”) with each Renewable Asset’s PPA expiring (assuming that renewal options are exercised) in years ranging from 2029 to 2033. The electricity prices under these contracts are adjusted according to a predetermined formula defined in each contract, generally, at a percentage of the consumer price index (“CPI”) change in Ontario.

Electricity Prices – Post Power Purchase Agreement

Each Renewable Asset has an expected useful life that extends beyond the term of the PPA. Enbridge management has developed a power price forecast for the period following the expiration of each Renewable Asset’s respective PPA. The post PPA power price forecasts were assumed to be at pricing levels generally below each Renewable Asset’s PPA price. CIBC has relied on post-PPA pricing forecasts provided by Enbridge.

Eco-Energy

Each Renewable Asset has qualified to receive a per MWh subsidy under the Government of Canada’s Eco-Energy program. The Talbot and EOWP Renewable Assets qualify for a $10/MWh subsidy while Sarnia qualifies for a $5/MWh subsidy.

General Inflation

Throughout the forecast, the inflation assumption is based on the Province of Ontario rate of inflation which has been assumed to be 2%. This inflation rate of 2% is in line with the long run inflation control target of the Bank of Canada.

Operating Costs

Each Renewable Asset has individual operating and maintenance agreements (“O&M Contract”) with third-party service providers. These O&M Contracts are unique to each Renewable Asset, but collectively provide comprehensive operating and maintenance coverage to each respective Renewable Asset for the life of the agreement. The forecast incorporates the O&M Contract expenses. Following expiry of each contract, the forecast has assumed that operating and maintenance expenses would be consistent with the costs

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under each respective O&M Contract and would grow at a rate of inflation. SAIC has reviewed the operating and maintenance cost assumptions and believes that they are sufficient to support the continued operation of each Renewable Asset beyond expiry of each Renewable Asset’s respective PPA.

Capital Expenditures

The capital expenditure assumption developed by Enbridge considered both the expected life of the Renewable Assets as well as expected forecasted maintenance expenditures. Each Renewable Asset’s capital expenditure requirements are unique depending on the terms of the O&M Contract and are supplemental to the O&M Contract expenses. SAIC has reviewed the capital expenditure forecasts and believe that they are sufficient to support the continued operation of each Renewable Asset beyond expiry of each Renewable Asset’s respective PPA.

Income Taxes

Cash income taxes, provided by Enbridge, were based on calculations of taxable income and the tax rates applicable to the Renewable Assets over the forecasted period. The forecast included the benefit of the Renewable Assets’ undepreciated capital costs (“UCC”) tax attributes. For purposes of the cash flow forecast, it is assumed that the full amount of the capital cost allowance (“CCA”) claim could be applied to EIF’s taxable income to reduce cash taxes in each given year on an accelerated basis.

The following table sets out a summary of the financial projections:

Years Ending December 31,

(CAD$ millions) 20111 2012 2013 2014 2015 2016 2017 2018 2019 2020

Average 2021 – 2033

Production GWh 229.5 919.2 922.2 921.3 920.4 921.7 918.6 917.7 916.8 918.1 910.1 Revenue 34.1 136.4 136.6 136.4 136.2 136.2 135.7 135.5 130.3 130.1 118.0 EBITDA 28.9 114.9 114.7 114.0 113.3 112.9 111.9 111.2 105.6 104.8 88.9 Capex 0.0 0.1 0.1 0.1 0.1 2.7 2.7 2.7 6.7 6.7 6.7 Free Cash Flows 90.1 119.8 102.8 94.0 89.3 84.5 82.9 82.0 73.8 73.5 61.7 Assumes September 30, 2011 closing.

Terminal Value

In considering the terminal value of the Renewable Assets, a 6.0x multiple was applied to the final year of the Renewable Assets’ 2033E EBITDA. We adjusted 2033E EBITDA to include the expected impact of merchant pricing assumptions post 2033 for Kincardine given the PPA for such asset expires in 2033. In selecting the terminal multiple, we considered the levels of operating and maintenance and capital expenditures that were being forecast for each Renewable Asset and the estimated remaining useful life of the assets based on the observations / findings of SAIC.

A terminal multiple of 6.0x results in a net present value of $108 million to $133 million based on a discount rate range of 5.5% to 6.5%.

Discount Rates

Discount rates are applied to future cash flows to factor in the time value of money and arrive at a net present value of the future cash flows at a point in time. The unlevered free

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cash flows of the Renewable Assets were discounted to September 30, 2011. For the purposes of our unlevered DCF valuation, we calculated a WACC for the Renewable Assets of 5.9% and applied this discount rate to the future unlevered free cash flows generated by the Renewable Assets.

CIBC carried out a series of calculations and consulted certain third-party sources in estimating a beta for the Renewable Assets based on the adjusted average (excludes data points +/- one standard deviation from the mean) beta of the comparable companies. In addition, the following assumptions formed part of CIBC’s calculation of the theoretical WACC for the Renewable Assets:

(a) Cost of debt was calculated based on current market rates for EIFH;

(b) Corporate statutory tax rate of 25.0%;

(c) Risk-free rate of 2.3%, based on the current 10 year Canadian treasury bond yield;

(d) Optimal capital structure of 53.3% debt and 46.7% equity; and

(e) Size premium of 1.8%. The calculation of the theoretical WACC is summarized below:

Cost of Debt

Pre-tax cost of debt 4.8% Tax rate 25.0% After-tax cost of debt 3.6%

Cost of Equity

Equity market risk premium 6.7% Re-levered beta 0.65 Risk-free rate 2.3% Size premium 1.8% Cost of equity 8.5%

WACC

Optimal capital structure (% debt) 53.3% Optimal capital structure (% equity) 46.7%

WACC 5.9%

Source: Morningstar, Risk Premia Over Time Report (2011).

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DCF Summary

CIBC’s unlevered DCF valuation analysis resulted in value range of $1,086 to $1,232 million, based on applying a WACC range of 5.5% to 6.5%.

DCF Sensitivity Analysis

As part of our DCF analysis we performed analyses on certain key assumptions of Enbridge’s financial forecast. The results of these sensitivities are outlined below:

DCF Sensitivity Analysis (CAD$MM)

Key Assumption Sensitivity Impact on Value

Operating Expenses (2012-2033) +10% / (10%) ($29) / $30

Terminal Exit Multiple +1.0x / (1.0x)

$21 / ($20)

Average Production MWh over Forecast (6.4%) (SAIC forecast) ($56)

Average Energy Pricing per MWh (2030-2033) +10% / (10%) $36 / ($17)

Precedent Transactions Analysis

The precedent transactions approach considers transaction multiples in the context of the purchase or sale of a comparable company or asset. The prices paid for similar renewable energy companies and assets and the implied multiples provide a general measure of relative value. These multiples include a premium for control of the comparable company or asset. In selecting relevant transactions, factors such as operating status, asset size, MW generation capacity, location, and percentage of assets under contract are considered, amongst others. CIBC considered the multiples of TEV / 1-year forward fiscal year EBITDA (EBITDA based on disclosed forward EBITDA estimates or prevailing equity research analyst’s estimates). TEV is defined as the market value of common equity and preferred shares plus the book value of long-term debt and minority interest minus the book value of cash and cash equivalents. The use of the 1 year forward fiscal year EBITDA multiple was considered to be the most relevant metric for Renewable Asset precedent transaction analysis due to many of the precedent transactions involving companies / assets for which new projects were coming on-line, and therefore future EBITDA would better reflect the cash flow acquired.

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CIBC identified a list of comparable precedent transactions, where public information was available and examined a sample of renewable power precedent transactions completed between April 2007 and March 2011 on a TEV / Fiscal Year+1 EBITDA basis, as noted below.

Precedent Transactions

Date Asset (Seller) Acquirer TEV TEV/LTM EBITDA

TEV/EBITDA (FY+1)1

($MM) (x) (x)

Mar 2011 Plutonic Power Corp.2 Magma Energy Corp. 450 nmf 11.1x Feb 2011 Cloudworks Energy Inc. Innergex Renewable Energy Inc. 417 n.a. n.a. Feb 2011 AbitibiBowater (Hydroelectric Portfolio) Consortium – Financial and Strategic 640 n.a. n.a. Sept 2010 ENMAX (B.C. Hydroelectric Assets) Veresen Inc. 115 n.a. n.a. Jan 2010 Innergex Power Income Fund Innergex Renewable Energy Inc. 353 13.4x 9.7x Jul 2009 Canadian Hydro Developers Inc.4 TransAlta Corp. 1,653 nmf 12.3x Jul 2009 Brookfield Renewable Power5 Great Lakes Hydro Income Fund 1,055 10.7x 11.1x Apr 2009 Northland Power Inc.6 Northland Power Income Fund 933 nmf 8.9x Dec 2008 Brookfield Renewable Power Great Lakes Hydro Income Fund 462 11.0x n.a. Apr 2008 Creststreet Power Income Fund FPL Energy 152 13.4x 11.1x Nov 2007 Le Nordais Wind Farm Canadian Hydro Developers Inc. 121 13.4x n.a. Oct 2007 Baie-des-Sables / Anse-à-Valleau Innergex Power Income Fund 173 n.a. 11.2x Apr 2007 Clean Power Income Fund Macquarie Power & Infrastructure

Income Fund 422 15.2x n.a.

Median 13.4x 11.1x Mean 12.9x 10.8x Adj. Mean7 13.4x 10.8x

1 Reflects analyst one year forward fiscal year consensus estimates. 2 Reflects analyst consensus pro forma Q3 2010 balance sheet items and share count adjustments for Plutonic Power / Magma

energy merger. CIBC acted as advisor to sellers in both transactions, but due to confidentiality obligations cannot disclose transaction multiples. 4 LTM EBITDA not meaningful due to significant future development project pipeline. 5 Implied TEV and EBITDA attributable to acquisition reflect that only of purchased hydro assets. 6 TEV does not include 18% claw back for development assets dependent on potential future revenue. 7 Adjusted average excludes multiples +/- one standard deviation away from the mean.

We note that CIBC also examined capacity and generation multiples for the precedent transactions, but believe that multiples based on EBITDA are more appropriate for the purposes of valuation given the inconsistent publicly available information regarding operating metrics related to the precedent transactions selected. CIBC considered the precedent transaction analysis in the completion of our value analysis.

Precedent Transaction Summary

CIBC’s precedent transaction analysis resulted in value range of $1,149 to $1,322 million, based on applying a TEV / Forward EBITDA multiple range of 10.0x to 11.5x.

Precedent Transaction Analysis Summary

2012E EBITDA Multiple

Implied Value (CAD$MM)

Metric: Input Low High Low High

2012E EBITDA $115 10.0x 11.5x $1,149 $1,322

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Comparable Companies Trading Analysis

In the comparable companies trading approach, CIBC assessed the public market trading metrics of public companies in the renewable power generation industry to determine the fair value of the Renewable Assets. CIBC identified four public companies as having the most similar asset characteristics to the Renewable Assets. The key criteria considered in evaluating the comparability of these companies and selecting them for the peer group were that these companies are solely focused on renewable / clean power generation and have the majority of their power contracted through off-take agreements.

Comparable Companies

Company Name Market Cap.1 TEV2 TEV / 2011E

EBITDA TEV / 2012E

EBITDA3

CAD$MM CAD$MM (x) (x) Alterra Power Corp. 345 831 16.4x 14.3x Brookfield Renewable Power Fund 2,541 4,113 14.8x 11.6x Innergex Renewable Energy Inc. 773 1,877 17.8x 13.6x Northland Power 1,225 2,163 13.7x 10.8x Average 15.7x 12.6x Adjusted Average4 15.6x 12.6x 1 As at September 7, 2011. 2 TEV includes convertible debentures, non-recourse debt and preferred stock. 3 Bloomberg consensus estimates. Reuters estimates used for Alterra. 4 Adjusted average excludes multiples +/- one standard deviation away from the mean.

Comparable Companies Trading Approach Summary

In applying this methodology we considered forecasted 2012E EBITDA to be the most relevant year to which to apply a TEV multiple based on comparable company trading multiples. Applying trading multiples ranging from 10.5x to 12.5x 2012E EBITDA, the implied valuation range is $1,207 to $1,437.

Comparable Companies Trading Analysis Summary

Trading Multiple Implied Value (CAD$MM)

Metric: Input Low High Low High

2012E EBITDA $115 10.5x 12.5x $1,207 $1,437

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Valuation Conclusion

In arriving at our opinion of the Fair Market Value of the Renewable Assets, we, in the exercise of our professional judgment, have not attributed valuation weightings to each valuation methodology but have made qualitative judgments based on our experience in rendering such opinions. For purposes of our valuation analysis, CIBC considered the results of each of the DCF, precedent transaction and comparable companies trading analysis in determining an appropriate value range for the Renewable Assets.

Valuation Summary Valuation Analysis (CAD$MM)

Overview of Valuation Methodologies Low High

DCF $1,086 $1,232

Precedent Transactions $1,149 $1,322

Comparable Companies Trading Analysis $1,207 $1,437

Fair Market Value of the Renewable Assets – Selected Range $1,100 $1,250

Based upon and subject to the foregoing and such other factors as we considered relevant, CIBC is of the opinion that, as of September 8, 2011, the Fair Market Value of the Renewable Assets is in the range of $1,100 to $1,250 million.

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FAIRNESS OPINION

The conclusion of our Fairness Opinion is subject to all of the conditions, limitations, qualifications, disclaimers and assumptions reflected in and underlying the Valuation, as described above. The analysis, investigations, research, testing of assumptions and conclusions reflected in and underlying the Valuation are integral to the provision of our Fairness Opinion.

In arriving at our Fairness Opinion, CIBC considered several factors including but not limited to the following:

i) The Purchase Price falls within our range of Fair Market Value for the Renewable Assets; and

ii) The Proposed Transaction is expected to be accretive to cash available for distribution.

Fairness Opinion Conclusion

Based upon and subject to the foregoing and such other matters as we considered relevant, it is our opinion, as of the date hereof, that the Consideration payable by ECT for the Renewable Assets pursuant to the PSPCA is fair, from a financial point of view, to ECT and EIFH.

Yours very truly,

B-1

APPENDIX BCONSENTS OF EXPERTS

CONSENT OF AUDITORS

We have read the Notice of Special Meeting and Management Information Circular of Enbridge Income Fund Holdings Inc. (the “Corporation”) dated September 13, 2011 (the “Circular”) relating to the acquisition by indirect wholly-owned subsidiaries of Enbridge Income Fund of interests in entities that own certain renewable assets presently owned by indirect wholly-owned subsidiaries of Enbridge Inc. We have complied with Canadian generally accepted standards for an auditor’s involvement with offering documents.

We consent to the incorporation by reference in the above-mentioned Circular of our report to the shareholders of the Corporation on the statement of financial position of the Corporation as at December 31, 2010 and the statements of earnings and comprehensive income, shareholders’ equity and cash flows for the period from March 26, 2010, date of incorporation, to December 31, 2010. Our report is dated February 1, 2011.

We consent to the incorporation by reference in the above-mentioned Circular of our report to the unitholders of Enbridge Income Fund (the “Fund”) on the consolidated statement of financial position of the Fund as at December 31, 2010 and 2009 and the consolidated statements of earnings, comprehensive income (loss), unitholders’ equity and cash flows for each of the years in the two year period ended December 31, 2010. Our report is dated February 1, 2011.

We consent to the use in the above-mentioned Circular of our report to the shareholders and unitholders of Enbridge Renewable Energy Infrastructure Limited Partnership, and its subsidiary, Ontario Sustainable Farms Inc., Enbridge Renewable Infrastructure Canada Inc., Talbot Windfarm GP Inc., Talbot Windfarm LP, 1682399 Ontario Corp., (collectively, the “Renewable Entities”) on the combined statement of financial position of the Renewable Entities as at December 31, 2010 and the combined statements of earnings and comprehensive income and cash flows for the year then ended. Our report is dated September 1, 2011.

(signed) “PricewaterhouseCoopers LLP”Chartered AccountantsCalgary, Alberta, CanadaSeptember 13, 2011

B-2

CONSENT OF CIBC WORLD MARKETS INC.

Dated: September 13, 2011

To the Joint Committee (the "Special Committee") of independent trustees of Enbridge Commercial Trust ("ECT") and independent directors of Enbridge Income Fund Holdings Inc. ("EIFH")

We hereby consent to the references to our firm name and to the reference to our fairness opinion and valuation dated September 8, 2011, contained under the headings "Summary-Transaction-Valuation and Fairness Opinion", "Matters to be Acted upon at the Meeting - Background to the Transaction", "Matters to be Acted upon at the Meeting - Valuation and Fairness Opinion", "Matters to be Acted upon at the Meeting -Recommendation of the Joint Special Committee and the Board" and "Experts" and the inclusion of the text of our fairness opinion and valuation dated September 8, 2011 as Appendix A to the Management Information Circular dated September 13, 2011. Our fairness opinion and valuation was given as at September 8, 2011 and remains subject to the assumptions, qualifications and limitations contained therein. In providing our consent, we do not intend that any person other than the directors of EIFH and trustees of ECT shall be entitled to rely upon our fairness opinion and valuation.

(Signed) “CIBC World Markets Inc.”

B-3

CONSENT OF SAIC ENERGY, ENVIRONMENT & INFRASTRUCTURE, LLCand DNV RENEWABLES (USA) INC.

Ladies and Gentlemen:

This letter is furnished relating to the management information circular dated September 13, 2011 (the “Management Information Circular”) of Enbridge Income Fund Holdings Inc. (the “Corporation”) prepared in connection with a meeting of holders of common shares of the Corporation (the “Common Shares”) to be held on October 17, 2011.

SAIC Energy, Environment & Infrastructure, LLC (“SAIC”) has been retained by the Corporation and Enbridge Commercial Trust (“ECT”) as the Independent Engineer to prepare an Independent Engineer’s Report dated September 13, 2011 (the “Report”). The Report was prepared pursuant to the scope of services under Professional Services Agreement dated August 5, 2011 among SAIC, the Corporation, and ECT. Certain portions of the report were prepared for SAIC by DNV Renewables (USA) Inc (“DNV”) in accordance with Subconsultant Task Authorization dated July 5, 2011 to a Subconsultant Agreement dated April 29, 2004. Consent is given to the reference to the Report under the headings “SAIC Report” and “Experts” contained in the Management Information Circular. Changed conditions occurring or becoming known after September 13, 2011 could affect the information presented to the extent of such changes.

This letter is not to be used for any purpose other than in connection with the Management Information Circular.

Very truly yours,

(Signed) “SAIC ENERGY, ENVIRONMENT & INFRASTRUCTURE, LLC”(Signed) “DNV RENEWABLES (USA) INC.”

C-1

APPENDIX CFINANCIAL STATEMENTS

TALBOT WINDFARM GP INC.;TALBOT WINDFARM LP;

1682399 ONTARIO CORP.;ENBRIDGE RENEWABLE ENERGY INFRASTRUCTURE CANADA INC.;

ENBRIDGE RENEWABLE ENERGY INFRASTRUCTURE LIMITED PARTNERSHIP, and its subsidiary, ONTARIO SUSTAINABLE FARMS, INC.

collectively, the

RENEWABLE ENTITIES

Combined Financial Statements(unaudited)

June 30, 2011

These combined financial statements are prepared in accordance with Canadian GAAP applicable to private enterprises, which are Canadian accounting standards for private enterprises in Part II of the Canadian Institute of Chartered Accountants Handbook (Handbook). The recognition, measurement and disclosure requirements of Canadian GAAP applicable to private enterprises differ from those of Canadian GAAP applicable to publicly accountable enterprises, which are International Financial Reporting Standards incorporated into the Handbook, or Part V of the Handbook in the case of rate regulated entities for the 2011 fiscal year. Enbridge Income Fund, the expected acquirer of the Renewable Entities, is a qualifying rate regulated entity and will present its consolidated financial statements in accordance with Part V for the 2011 fiscal year. The pro forma financial statements included in the Management Information Circular include adjustments relating to the businesses to be acquired and present pro forma financial information prepared using principles consistent with the accounting principles used by the issuer.

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RENEWABLE ENTITIESCOMBINED STATEMENTS OF EARNINGS



2011 2010 2011 2010(unaudited; millions of Canadian dollars)

Power production revenue 38.0 13.8 70.8 28.0

ExpensesOperating and administrative 5.5 2.9 11.0 5.5Depreciation and amortization 11.8 5.8 23.7 11.6Interest and other 0.3 0.2 0.4 0.4

17.6 8.9 35.1 17.520.4 4.9 35.7 10.5

Income Taxes (Note 9) 0.2 0.1 0.1 0.2Earnings 20.6 5.0 35.8 10.7The accompanying notes are an integral part of these combined financial statements.

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RENEWABLE ENTITIESCOMBINED STATEMENTS OF CASH FLOWS



2011 2010 2011 2010(unaudited; millions of Canadian dollars)

Operating Activities Earnings 20.6 5.0 35.8 10.7 Depreciation and amortization 11.8 5.8 23.7 11.6 Future income taxes (0.2) - (0.2) (0.1) Changes in operating assets and liabilities (Note 10) (18.9) (2.2) (20.9) (0.4)

13.3 8.6 38.4 21.8Investing Activities Additions to property, plant and equipment, net (0.1) (41.5) 1.1 (101.6) Change in construction payable (Note 10) 1.1 5.7 (3.0) (1.7)

1.0 (35.8) (1.9) (103.3)Financing Activities Partnership contributions received (Note 7) 11.3 36.2 19.8 96.6 Partnership distributions paid (Note 7) (29.0) (9.0) (49.1) (18.0)

(17.7) 27.2 (29.3) 78.6Increase/(Decrease) in Cash and Cash Equivalents (3.4) - 7.2 (2.9)Cash and Cash Equivalents/(Bank Overdraft) at Beginning of Period 21.6 (1.6) 11.0 1.3

Cash and Cash Equivalents/(Bank Overdraft) at End of Period 18.2 (1.6) 18.2 (1.6)

Supplemental Cash Flow InformationInterest Paid 0.1 0.2 0.4 0.4The accompanying notes are an integral part of these combined financial statements.

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RENEWABLE ENTITIESCOMBINED STATEMENTS OF FINANCIAL POSITION

June 30, December 31, January 1,2011 2010 2010

(unaudited; millions of Canadian dollars)

AssetsCurrent assets

Cash and cash equivalents 18.2 11.0 1.3Accounts receivable and other 19.8 16.6 16.3Loan to affiliate 35.0 35.0 -

73.0 62.6 17.6Property, plant and equipment, net (Note 4) 1,076.7 1,101.2 633.0Intangible assets (Note 5) 16.8 17.2 17.9

1,166.5 1,181.0 668.5Liabilities and shareholder’s equityCurrent liabilities

Loans from affiliate 9.1 9.1 13.1Accounts payable and other 6.9 27.9 18.2

16.0 37.0 31.3Asset retirement obligations (Note 6) 2.3 2.2 1.1Future income taxes (Note 9) 2.9 3.0 3.4

21.2 42.2 35.8Equity

Common shares (Note 7) 46.6 46.6 9.2Partners’ equity (Note 7) 1,013.2 1,042.5 601.3Retained earnings 85.5 49.7 22.2

1,145.3 1,138.8 632.7Commitments (Note 12)

1,166.5 1,181.0 668.5The accompanying notes are an integral part of these combined financial statements.

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RENEWABLE ENTITIESNOTES TO THE UNAUDITED COMBINED FINANCIAL STATEMENTS

The accompanying unaudited combined financial statements combine the accounts of Talbot Windfarm GP Inc. (Talbot GP), Talbot Windfarm LP (Talbot LP), 1682399 Ontario Corp. (1682399), Enbridge Renewable Energy Infrastructure Canada Inc. (ERIC), and Enbridge Renewable Energy Infrastructure Limited Partnership (ERIP) and ERIP’s wholly-owned subsidiary, Ontario Sustainable Farms, Inc. (collectively, the Renewable Entities or the Companies). The Renewable Entities are under the common ownership, directly or indirectly, of Enbridge Inc. (Enbridge). The Companies’ financial statements have been prepared on a combined basis as Enbridge intends to dispose of all its equity interests in these Companies at once.

In May 2011, Enbridge Income Fund Holdings Inc. (ENF) and Enbridge Income Fund (the Fund) received a proposal from Enbridge, pursuant to which Enbridge would transfer the Renewable Entities to the Fund (the Transaction). The Transaction is subject to all necessary approvals, including approval by the Boards of ENF and the Fund, the minority shareholders of ENF, as well as regulatory approval. ENF and the Fund have formed a joint special committee comprised of independent trustees and directors to review the proposal and make recommendations to the respective boards of the Fund and ENF. Should board approval be received, these combined financial statements have been prepared by management in anticipation of inclusion in the Management Information Circular of ENF in connection with the special meeting of the shareholders of ENF to approve the Transaction and the Fund’s Business Acquisition Report.

1. BASIS OF PREPARATION AND ADOPTION OF ASPE

Effective January 1, 2011, the Companies adopted accounting standards for private enterprises as set out in Part II (ASPE or Part II) of the Handbook of the Canadian Institute of Chartered Accountants (CICA Handbook). The Companies have applied the same ASPE accounting policies as described in Note 2 throughout all periods presented.

In these combined financial statements, the term “Canadian GAAP” refers to Part V – Pre-changeover accounting standards as set out in the CICA Handbook (Canadian GAAP or Part V) before the adoption of ASPE. The unaudited interim financial statements for the six months ended June 30, 2011 should be read in conjunction with the Companies’ Canadian GAAP financial statements for the year ended December 31, 2010. Amounts are stated in millions of Canadian dollars, unless otherwise indicated.

RECONCILIATION OF EQUITY AND COMPREHENSIVE INCOMEA reconciliation of equity as previously reported under Canadian GAAP to equity in accordance with ASPE at January 1, 2010 and comprehensive income for the year ended December 31, 2010 follows.

January 1, 2010(unaudited, millions of Canadian dollars)

Equity as reported under Canadian GAAP 632.6Application of hedge accounting 0.1Equity as reported under ASPE 632.7

Year ended December 31, 2010

(unaudited, millions of Canadian dollars)Comprehensive income as reported under Canadian GAAP 26.6Application of hedge accounting 0.9Earnings as reported under ASPE 27.5

The transition from Canadian GAAP to ASPE had no impact on retained earnings or earnings of the Companies.

6

The fair value of derivative financial instruments which qualified for hedge accounting under Canadian GAAP has been removed from the combined statements of financial position and other comprehensive income. Prior to the transition, the effective portion of the change in the fair value of the cash flow hedge was recorded in other comprehensive income and reclassified to earnings when the hedged item impacted earnings. Under ASPE, gains and losses on cash flow hedges are recorded in earnings when realized.

RECONCILIATION TO PART VEnbridge, the indirect parent of the Companies, and the Fund, the expected acquirer of the Companies, presented their consolidated financial statements as at and for the year ended December 31, 2010 in accordance with Part V of the CICA Handbook. Enbridge and the Fund will continue to present their consolidated financial statements in accordance with Part V for the 2011 fiscal year as permitted for qualifying rate regulated entities.

Differences between Part II and Part V which affect the Companies are limited to the treatment of derivatives. Under Part V, the effective portion of the change in the fair value of a cash flow hedging instrument is recorded in other comprehensive income and reclassified to earnings on maturity of the hedging instrument. Under Part II, gains and losses on qualifying cash flow hedges are recognized on maturity in the same category of earnings as the hedged item.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATIONThe combined financial statements include the accounts of Talbot GP, Talbot LP, 1682399, ERIC and ERIP. The accounts of ERIP reflect the combined accounts of ERIP and its wholly-owned subsidiary, Ontario Sustainable Farms Inc. In preparing the combined financial statements, intra-group balances between the Renewable Entities have been eliminated.

ACCOUNTING ESTIMATESThe preparation of financial statements in conformity with ASPE requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses as well as the disclosure of contingent assets and liabilities in the combined financial statements. Significant estimates and assumptions used in the preparation of the combined financial statements include, but are not limited to: depreciation rates and carrying value of property, plant and equipment and intangible assets; asset retirement obligations; fair value of financial instruments; income taxes; and commitments. Actual results could differ from these estimates.

REVENUE RECOGNITIONRevenue derived from the sale of electricity from wind and solar power generation is recognized on an accrual basis at the time electricity is delivered. Electricity is delivered at the point of interconnection to the grid and at rates pursuant to the relevant power purchase agreements. Pre-production revenue earned prior to commercial operation has been offset against the costs capitalized. Customer creditworthiness is assessed prior to agreement signing as well as throughout the contract duration.

FINANCIAL INSTRUMENTSCash and Cash EquivalentsCash and cash equivalents are measured at fair value.

Loans and ReceivablesLoans and receivables, which include accounts receivable and other and loans to affiliates, are measured at amortized cost using the effective interest rate method, net of any impairment losses recognized.

Other Financial LiabilitiesOther financial liabilities are recorded at amortized cost using the effective interest rate method and include loans from affiliates and accounts payable and other.

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Cash Flow Hedges The Companies use cash flow hedges to manage changes in foreign exchange rates. The cash flow hedges qualify for hedge accounting. Gains and losses are recognized on maturity of the cash flow hedges in the same category of earnings as the hedged item.

If a cash flow hedge is terminated, any gain or loss incurred on its termination is recognized in a separate component of equity until the anticipated transaction occurs. When the anticipated transaction occurs, the gain or loss is removed from equity and is recognized in earnings at the same time as the hedged item. When a hedged item ceases to exist, the critical terms of the hedging item cease to match those of the hedged item, or it is no longer probable that an anticipated transaction will occur in the amount designated or within two weeks of the maturity date of the hedging item, the fair value of the hedging item is recorded and any gain or loss recognized in earnings.

ImpairmentWith respect to loans and receivables, the Companies assess the assets for impairment when it no longer has reasonable assurance of timely collection. If evidence of impairment is noted, the Companies reduce the value of the loan or receivable to its estimated realizable amount, determined using discounted expected future cash flows.

INCOME TAXESThe liability method of accounting for income taxes is followed by 1682399, ERIC, Ontario Sustainable Farms Inc. and Talbot GP. Future income tax assets and liabilities are recorded based on temporary differences between the tax bases of assets and liabilities and their carrying values for accounting purposes. Future income tax assets and liabilities are measured using the tax rate that is expected to apply when the temporary differences reverse.

Talbot LP and ERIP are partnerships which are not taxable entities.

CASH AND CASH EQUIVALENTSCash and cash equivalents include short-term investments with a term to maturity of three months or less when purchased.

PROPERTY, PLANT AND EQUIPMENTExpenditures for construction, expansion, major renewals and betterments are capitalized. Maintenance and repair costs are expensed as incurred. Expenditures for project development are capitalized if they are expected to have a future benefit. The Companies capitalize interest incurred during construction. Depreciation of property, plant and equipment is provided on a straight-line basis over the estimated service lives of the assets commencing when the asset is placed in service.

INTANGIBLE ASSETSIntangible assets consist primarily of contracts associated with the projects, which are amortized on a straight-line basis over 25 years, commencing when the asset is available for use.

IMPAIRMENT OF LONG-LIVED ASSETSThe Companies review the carrying values of their long-lived assets as events or changes in circumstances warrant. If it is determined that the carrying value of an asset exceeds the undiscounted cash flows expected from the asset, the asset is written down to fair value.

ASSET RETIREMENT OBLIGATIONSAsset retirement obligations (AROs) associated with the retirement of long-lived assets are recognized in the period in which they are incurred when a reasonable estimate of the AROs can be made. The amount recognized as an ARO will be the best estimate of the expenditure required to settle the present obligation at the balance sheet date. The best estimate of expenditure approximates the cost a third party would charge to perform the tasks necessary to retire such assets and is recognized at the present value of expected future cash flows discounted at the time ARO is recognized. AROs are added to the carrying value of the associated asset and depreciated over the asset’s useful life. The corresponding liability is

8

accreted over time through charges to earnings and is reduced by actual costs of decommissioning and reclamation. The Companies’ best estimates of retirement costs could change as a result of changes in cost estimates and regulatory requirements.

3. CHANGES IN ACCOUNTING ESTIMATE

In 2011, the Companies revised their estimate of the useful lives of certain components of property, plant and equipment. The updated estimated useful lives more accurately reflect the periods over which the assets will be available for use. The change in estimated useful lives was accounted for on a prospective basis from January 1, 2011 and will affect depreciation expense in future periods. The revised weighted average depreciation rates range from 4% to 20% for component assets.

4. PROPERTY, PLANT AND EQUIPMENT

June 30, 2011Weighted AverageDepreciation Rate Cost

Accumulated Depreciation Net

(millions of Canadian dollars)

Wind turbines and other 4.0%-20.0% 741.4 (52.0) 689.4Solar panels and other 4.0%-20.0% 394.5 (14.6) 379.9Land and right-of-way 4.0% 7.6 (0.2) 7.4

1,143.5 (66.8) 1,076.7

December 31, 2010Weighted AverageDepreciation Rate Cost



Wind turbines and other 4.0% 742.7 (36.6) 706.1Solar panels and other 4.0% 394.5 (6.9) 387.6Land and right-of-way 4.0% 7.6 (0.1) 7.5

1,144.8 (43.6) 1,101.2

Total depreciation expense for the six months ended June 30, 2011 was $23.2 million (June 30, 2010 -$11.3 million). Property, plant and equipment includes capitalized interest of $26.7 million at June 30, 2011(December 31, 2010 - $26.7 million).

5. INTANGIBLE ASSETS

June 30, 2011Weighted AverageAmortization Rate Cost

Accumulated Amortization Net


Contracts and other 4.0% 18.5 (1.7) 16.8

December 31, 2010Weighted AverageAmortization Rate Cost

Accumulated Amortization Net


Contracts and other 4.0% 18.5 (1.3) 17.2

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6. ASSET RETIREMENT OBLIGATIONS

June 30, 2011

December

31, 2010(millions of Canadian dollars)

Obligations at beginning of period 2.2 1.1Liabilities incurred - 1.4Change in estimate - (0.4)Accretion expense 0.1 0.1

Obligations at end of period 2.3 2.2

Asset retirement obligations arise from obligations to retire the wind and solar farm assets at the end of the project life. The Companies estimate that the undiscounted amount of expected cash flows required to settle the obligations will be $73.4 million to be settled between 2058 and 2060. The asset retirement obligation has been discounted using a rate of 7.4%.

7. EQUITY

COMMON SHARESThe authorized share capital of 1682399 and ERIC consist of an unlimited number of common shares. 1682399 is also authorized to issue an unlimited number of preferred shares. As at June 30, 2011 and December 31, 2010, no preferred shares were issued and outstanding. Common shares issued and outstanding are as follows:

ERIC 1682399Number of

Shares AmountNumber of

Shares AmountTotal

Amount(unaudited; millions of Canadian dollars except number of shares)Balance at June 30, 2011 and December 31, 2010 2,500,000 2.5 9,122,806 44.1 46.6

PARTNERS’ EQUITYThe Talbot LP and ERIP partnerships are both authorized to issue an unlimited number of partnership units. Partnership units outstanding are as follows:

Talbot LP ERIPNumber of

Units AmountNumber of

Units AmountTotal

Amount(unaudited; millions of Canadian dollars except number of units)Balance at December 31, 2010 264,354,076 264.4 811,000,000 778.1 1,042.5 Capital contribution 19,503,418 19.8 - 19.8 Partnership distribution - (12.0) - (37.1) (49.1)Balance at June 30, 2011 283,857,494 272.2 811,000,000 741.0 1,013.2

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8. RISK MANAGEMENT

MARKET PRICE RISKThe Companies’ earnings and cash flows are subject to movements in foreign exchange rates and interest rates (collectively, market price risk). Formal risk management policies, processes and systems have been designed to mitigate these risks.

The following summarizes the types of market price risks to which the Companies are exposed and the risk management instruments used to mitigate them.

Interest Rate RiskThe Companies’ exposure to short-term interest rate variability is limited as loans to and from affiliates are at fixed rates. With respect to exposure to variability in longer term interest rates, the Companies do not typically manage the fair value of its affiliate loans.

Foreign Exchange RiskThe Companies have exposure to foreign exchange rate variability related to an operations and services agreement denominated in United States dollars. This exposure has been hedged by entering into foreign exchange forward contracts.

QUALIFYING DERIVATIVE INSTRUMENTSThe Companies have entered into the following foreign exchange swaps to manage fluctuations in foreign exchange rates. Hedge accounting has been applied. The foreign exchange swaps are expected to offset foreign exchange gains and losses resulting from the United States dollar denominated operations and services agreement. The foreign exchange swaps settle quarterly and coincide with the timing of payments pursuant to the operations and services agreement.

June 30, 2011(millions of Canadian dollars unless otherwise noted) Notional Principal

or Quantity MaturityForeign exchange swaps 21.1 2019-2020

December 31, 2010(millions of Canadian dollars unless otherwise noted) Notional Principal

or Quantity MaturityForeign exchange swaps 22.2 2019

LIQUIDITY RISKLiquidity risk is the risk that the Companies will not be able to meet their financial obligations, including commitments as they become due. In order to manage this risk, the Companies forecast the cash requirements over the near and long term to determine whether sufficient funds will be available. The Companies’ primary source of liquidity and capital resources are funds generated from operations, parent and partner contributions, and loans from affiliates.

CREDIT RISKCredit risk relates to the possibility that a loss may occur from counterparty’s failure to comply with its contractual requirements. The maximum exposure to credit risk is represented by the carrying amounts of cash and cash equivalents, accounts receivable and other, and loans to affiliates.

The Companies have minimal credit risk related to cash and cash equivalents as these amounts are held with large Canadian financial institutions. Credit risk related to receivables is mitigated through credit exposure limits and contractual requirements. Substantially all of the Companies’ trade receivables are owing from the Ontario Power Authority. The Ministry of Energy of the Province of Ontario, which currently

11

holds an investment grade credit rating, will honor Ontario Power Authority’s obligations under the related power purchase agreements. Credit risk associated with loans to affiliates is mitigated by ensuring loans are only extended to wholly-owned subsidiaries of Enbridge, the Companies’ ultimate parent company, which is a high creditworthy counterparty.

9. INCOME TAXES

At June 30, 2011 and December 31, 2010, the Companies have $3.5 million in unused tax loss carryforwards which will start to expire in 2015 and beyond.

10.CHANGES IN NON-CASH WORKING CAPITAL

Six months ended June 30, 2011 2010(millions of Canadian dollars)

Accounts receivable and other (3.2) 9.6Accounts payable and other (20.7) (11.7)

(23.9) (2.1)

Related toOperating activities (20.9) (0.4)Investing activities (3.0) (1.7)

(23.9) (2.1)

11.RELATED PARTY TRANSACTIONS

All related party transactions occur in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Affiliates refer to Enbridge Inc. and companies that are either directly or indirectly owned by Enbridge Inc.

The Company receives certain administrative and treasury services from affiliates. These services, which are charged at cost in accordance with service agreements or which reflect normal commercial trade terms, were $4.3 million for the six months ended June 30, 2011 (June 30, 2010 - $1.7 million).

At June 30, 2011, accounts payable and other included $1.8 million (December 31, 2010 - $2.6 million) due to affiliates.

12.COMMITMENTS

Payments due for contractual obligations over the next five years and thereafter are as follows:

TotalLess than

1 year1-3

years3-5

yearsAfter 5 years

(millions of Canadian dollars)Talbot Wind Farm Capital Commitment 1.3 1.3 - - -Maintenance Contract Commitments 73.9 5.8 21.4 22.1 24.6Land Lease Commitments 11.0 0.3 1.2 1.2 8.3Total Contractual Obligations 86.2 7.4 22.6 23.3 32.9

In addition to the fixed payments for the land lease commitments disclosed above, Talbot Windfarm LP also has a variable lease payment obligation based on 1.25% of revenues.

TALBOT WINDFARM GP INC.; TALBOT WINDFARM LP;

1682399 ONTARIO CORP.; ENBRIDGE RENEWABLE ENERGY INFRASTRUCTURE CANADA INC.;

ENBRIDGE RENEWABLE ENERGY INFRASTRUCTURE LIMITED PARTNERSHIP, and its subsidiary, ONTARIO SUSTAINABLE FARMS, INC.

collectively, the

RENEWABLE ENTITIES

Combined Financial Statements

December 31, 2010 and 2009

PricewaterhouseCoopers LLP 111 5 Avenue SW, Suite 3100, Calgary, Alberta, Canada T2P 5L3 T: +1 403 509 7500, F: +1 403 781 1825, www.pwc.com/ca “PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

Independent Auditor’s Report To the Shareholders and Unitholders of the Renewable Entities We have audited the accompanying combined financial statements of Enbridge Renewable Energy Infrastructure Limited Partnership, and its subsidiary, Ontario Sustainable Farms, Inc., Enbridge Renewable Energy Infrastructure Canada Inc., Talbot Windfarm GP Inc., Talbot Windfarm LP, 1682399 Ontario Corp. (collectively the Renewable Entities), which comprise the combined statements of financial position as at December 31, 2010 and the combined statements of earnings and comprehensive income, and cash flows for the year then ended, and the related notes, which comprise a summary of significant accounting policies and other explanatory information. Management’s responsibility for the combined financial statements Management is responsible for the preparation and fair presentation of these combined financial statements in accordance with Canadian generally accepted accounting principles, and for such internal control as management determines is necessary to enable the preparation of combined financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s responsibility Our responsibility is to express an opinion on these combined financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the combined financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the combined financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the combined financial statements. We believe that the audit evidence we have obtained in our audit is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the combined financial statements present fairly, in all material respects, the financial position of the Renewable Entities as at December 31, 2010 and the results of their operations and their cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.

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Other matter The combined financial statements of the Renewable Entities for year ended December 31, 2009 are unaudited. Chartered Accountants Calgary, Alberta September 1, 2011

2

RENEWABLE ENTITIES COMBINED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME Year ended December 31, 2010 2009 (millions of Canadian dollars) Power production revenue 67.7

(unaudited) 38.8

Expenses Operating and administrative 11.8 10.6 Depreciation and amortization 26.0 18.9 Interest and other 2.8 0.5 40.6 30.0 27.1 8.8 Income Taxes (Note 11) 0.4 0.3 Earnings 27.5 9.1 Other Comprehensive Income Change in unrealized losses on cash flow hedges, net of tax (0.9) (0.1)Comprehensive Income 26.6 9.0 The accompanying notes are an integral part of these combined financial statements.

3

RENEWABLE ENTITIES COMBINED STATEMENTS OF CASH FLOWS Year ended December 31, 2010 2009(millions of Canadian dollars) (unaudited)

Operating Activities Earnings 27.5 9.1 Charges/(credits) not affecting cash Depreciation and amortization 26.0 18.9 Future income taxes (0.4) (0.3) Changes in operating assets and liabilities (Note 12) (5.3) (0.5) 47.8 27.2Investing Activities Additions to property, plant and equipment (492.4) (201.5) Additions to intangible - (2.3) Change in construction payable (Note 12) 14.8 2.2 (477.6) (201.6)Financing Activities Net change in long-term liabilities (0.1) - Affiliate loans, net (39.0) (10.0) Partnership contributions received (Note 7) 805.4 183.8 Partnership distributions paid (Note 7) (364.2) - Common shares issued (Note 7) 37.4 - 439.5 173.8Increase/(Decrease) in Cash and Cash Equivalents 9.7 (0.6)Cash and Cash Equivalents at Beginning of Year 1.3 1.9Cash and Cash Equivalents at End of Year 11.0 1.3 Supplemental Cash Flow Information Interest paid 2.2 0.2The accompanying notes are an integral part of these combined financial statements.

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RENEWABLE ENTITIES COMBINED STATEMENTS OF FINANCIAL POSITION

December 31, 2010 2009(millions of Canadian dollars) (unaudited)

Assets Current Assets Cash and cash equivalents 11.0 1.3 Accounts receivable and other 16.6 16.3 Loan to affiliate (Note 13) 35.0 - 62.6 17.6

Property, Plant and Equipment, net (Note 4) 1,101.2 633.0Intangible Assets (Note 5) 17.2 17.9 1,181.0 668.5

Liabilities and Equity Current Liabilities Loans from affiliate (Note 13) 9.1 13.1 Accounts payable and other 28.0 18.2 37.1 31.3Asset Retirement Obligations (Note 6) 2.2 1.1Other Long-Term Liabilities 0.9 0.1Future Income Taxes (Note 11) 3.0 3.4 43.2 35.9Equity Common shares (Note 7) 46.6 9.2 Partners’ equity (Note 7) 1,042.5 601.3 Retained earnings 49.7 22.2 Accumulated other comprehensive loss (1.0) (0.1) 1,137.8 632.6Commitments (Note 14)

1,181.0

668.5The accompanying notes are an integral part of these combined financial statements.

Approved by: (signed) “Guy Jarvis” (signed) “Al Monaco” (signed) “Don Thompson”

Guy Jarvis, Director Al Monaco, Director Don Thompson, Director

5

RENEWABLE ENTITIES

NOTES TO THE COMBINED FINANCIAL STATEMENTS

1. GENERAL BUSINESS DESCRIPTION The accompanying financial statements combine the accounts of Talbot Windfarm GP Inc. (Talbot GP), Talbot Windfarm LP (Talbot LP), 1682399 Ontario Corp. (1682399), Enbridge Renewable Energy Infrastructure Canada Inc. (ERIC), and Enbridge Renewable Energy Infrastructure Limited Partnership (ERIP) and ERIP’s wholly-owned subsidiary, Ontario Sustainable Farms, Inc. (collectively, the Renewable Entities or the Companies). The Renewable Entities are under the common ownership, directly or indirectly, of Enbridge Inc. (Enbridge). The Companies’ financial statements have been prepared on a combined basis as Enbridge intends to dispose of all its equity interests in the Companies at once. The Renewable Entities are in the business of selling power generated from wind and solar projects. The Companies have three projects in service, all within the province of Ontario. These include the Enbridge Ontario Wind Project, a 190-megawatt (MW) facility located at Kincardine, the 99-MW Talbot wind project near Chatham and the 80-MW Sarnia solar facility. All of the projects sell their power to the Ontario Power Authority under long-term power purchase agreements. In May 2011, Enbridge Income Fund Holdings Inc. (ENF) and Enbridge Income Fund (the Fund) received a proposal from Enbridge, pursuant to which Enbridge would transfer the Renewable Entities to the Fund (the Transaction). The Transaction is subject to all necessary approvals, including approval by the Boards of ENF and the Fund, the minority shareholders of ENF, as well as regulatory approval. ENF and the Fund have formed a joint special committee comprised of independent trustees and directors to review the proposal and make recommendations to the respective boards of the Fund and ENF. Should board approval be received, these combined financial statements have been prepared by management in anticipation of inclusion in the Management Information Circular of ENF in connection with the special meeting of the shareholders of ENF to approve the Transaction and the Fund’s Business Acquisition Report.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The combined financial statements of the Companies have been prepared by management in accordance with Part V – Pre-changeover Accounting Standards of the Canadian Institute of Chartered Accountants (CICA) Handbook (Canadian GAAP or Part V). Amounts are stated in Canadian dollars unless otherwise noted. The preparation of financial statements in conformity with Canadian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses as well as the disclosure of contingent assets and liabilities in the combined financial statements. Significant estimates and assumptions used in the preparation of the combined financial statements include, but are not limited to: depreciation rates and carrying value of property, plant and equipment and intangible assets (Notes

4 and 5 ); asset retirement obligations (Note 6); fair value of financial instruments (Note 9); income taxes (Note 11); and commitments (Note 14). Actual results could differ from these estimates. The comparative amounts presented in the financial statements and the notes are unaudited. BASIS OF PRESENTATION The combined financial statements include the accounts of Talbot GP, Talbot LP, 1682399, ERIC and ERIP. The accounts of ERIP reflect the combined accounts of ERIP and its wholly-owned subsidiary, Ontario Sustainable Farms Inc. In preparing the combined financial statements, intra-group balances between the Renewable Entities have been eliminated. REVENUE RECOGNITION Revenue derived from the sale of electricity from wind and solar power generation is recognized on an accrual basis at the time electricity is delivered. Electricity is delivered at the point of interconnection to the

6

grid and at rates pursuant to the relevant power purchase agreements. Pre-production revenue earned prior to commercial operation has been offset against the costs capitalized. Customer creditworthiness is assessed prior to agreement signing as well as throughout the contract duration. FINANCIAL INSTRUMENTS The Companies classify financial assets and financial liabilities as held for trading, loans and receivables, other financial liabilities or derivatives in qualifying hedging relationships. All financial instruments, with the exception of those transacted with related parties which are recorded at exchange amount, are initially recorded at fair value on the combined statement of financial position. Subsequent measurement of the financial instrument is based on its classification. Held for Trading Financial assets and liabilities classified as held for trading are measured at fair value and consist of cash and cash equivalents. Loans and Receivables Loans and receivables, which include accounts receivable and other and loan to affiliate, are measured at amortized cost using the effective interest rate method, net of any impairment losses recognized. Other Financial Liabilities Other financial liabilities are recorded at amortized cost using the effective interest rate method and include loans from affiliate and accounts payable and other. Cash Flow Hedges The Companies use cash flow hedges to manage changes in foreign exchange rates. The effective portion of the change in the fair value of a cash flow hedging instrument is recorded in other comprehensive income (OCI) and is reclassified to earnings when the hedged item impacts earnings. Any hedge ineffectiveness is recorded in current period earnings. If a derivative instrument designated as a cash flow hedge ceases to be effective or is terminated, hedge accounting is discontinued and the gain or loss deferred in OCI up to that date will be recognized concurrently with the related transaction. If a hedged anticipated transaction is no longer probable, the gain or loss is recognized immediately in earnings. Subsequent gains and losses from ineffective derivative instruments are recognized in earnings in the period in which they occur. Impairment With respect to loans and receivables, the Companies assess the assets for impairment when it no longer has reasonable assurance of timely collection. If evidence of impairment is noted, the Companies reduce the value of the loan or receivable to its estimated realizable amount, determined using discounted expected future cash flows. INCOME TAXES The liability method of accounting for income taxes is followed by 1682399, ERIC, Ontario Sustainable Farms Inc. and Talbot GP. Future income tax assets and liabilities are recorded based on temporary differences between the tax bases of assets and liabilities and their carrying values for accounting purposes. Future income tax assets and liabilities are measured using the tax rate that is expected to apply when the temporary differences reverse. Talbot LP and ERIP are partnerships which are not taxable entities. CASH AND CASH EQUIVALENTS Cash and cash equivalents include short-term investments with a term to maturity of three months or less when purchased. PROPERTY, PLANT AND EQUIPMENT Expenditures for construction, expansion, major renewals and betterments are capitalized. Maintenance and repair costs are expensed as incurred. Expenditures for project development are capitalized if they

7

are expected to have a future benefit. The Companies capitalize interest incurred during construction. Depreciation of property, plant and equipment is provided on a straight-line basis over the estimated service lives of the assets commencing when the asset is placed in service. INTANGIBLE ASSETS Intangible assets consist primarily of contracts associated with the projects, which are amortized on a straight-line basis over 25 years, commencing when the asset is available for use. IMPAIRMENT OF LONG-LIVED ASSETS The Companies review the carrying values of their long-lived assets as events or changes in circumstances warrant. If it is determined that the carrying value of an asset exceeds the undiscounted cash flows expected from the asset, the asset is written down to fair value. ASSET RETIREMENT OBLIGATIONS Asset retirement obligations (AROs) associated with the retirement of long-lived assets are initially measured at fair value and recognized in the period when they can be reasonably determined. The fair value approximates the cost a third party would charge to perform the tasks necessary to retire such assets and is recognized at the present value of expected future cash flows discounted at the credit adjusted risk-free rate at the time ARO is recognized. AROs are added to the carrying value of the associated asset and depreciated over the asset’s useful life. The corresponding liability is accreted over time through charges to earnings and is reduced by actual costs of decommissioning and reclamation. The Companies’ estimates of retirement costs could change as a result of changes in cost estimates and regulatory requirements.

3. CHANGES IN ACCOUNTING POLICIES Future Accounting Policies Effective January 1, 2011, the Companies will adopt Part II - Accounting Standards for Private Enterprises (ASPE) as set out in the CICA Handbook. The transition to ASPE at January 1, 2011 requires the restatement, for comparative purposes, of amounts reported by the Companies for the year ended December 31, 2010 including the restatement of the opening balance sheet as at January 1, 2010. Changes in Accounting Policies - Business Combinations CICA Handbook Section 1582, Business Combinations, replaces Section 1581. The new standard requires assets and liabilities acquired in a business combination to be measured at fair value at the acquisition date and if applicable, any original equity interest in the investee to be re-measured to fair value through earnings on the date control is obtained. The standard also requires that acquisition-related costs, such as advisory or legal fees, incurred to effect a business combination be expensed in the period in which they are incurred. The adoption of this standard will impact the Companies’ accounting treatment of future business combinations occurring on or after January 1, 2011.

4. PROPERTY, PLANT AND EQUIPMENT

December 31, 2010 Weighted Average Depreciation Rate

Cost

Accumulated Depreciation

Net (millions of Canadian dollars) Wind turbines and other 4.0% 742.7 (36.6) 706.1 Solar panels and other 4.0% 394.5 (6.9) 387.6 Land and right-of-way 4.0% 7.6 (0.1) 7.5

1,144.8 (43.6) 1,101.2

8

December 31, 2009

Weighted Average Depreciation Rate Cost


(millions of Canadian dollars) Wind turbines and other 4.0% 454.7 (18.3) 436.4 Solar panels and other 4.0% 100.6 - 100.6 Land and right-of-way 4.0% 7.6 (0.1) 7.5 Under construction 88.5 - 88.5

651.4 (18.4) 633.0

Total depreciation expense for the year ended December 31, 2010 was $25.2 million (2009 - $18.5 million). Property, plant and equipment includes capitalized interest of $26.7 million (2009 - $26.7 million).

5. INTANGIBLE ASSETS

December 31, 2010

Weighted Average Amortization Rate

Cost

Accumulated Amortization

Net (millions of Canadian dollars) Contracts and other 4.0% 18.5 (1.3) 17.2

December 31, 2009

Weighted Average Amortization Rate

Cost

Accumulated Amortization

Net (millions of Canadian dollars) Contracts and other 4.0% 18.5 (0.6) 17.9

6. ASSET RETIREMENT OBLIGATIONS Year ended December 31, 2010 2009 (millions of Canadian dollars) Obligations at beginning of year 1.1 -

Liabilities incurred 1.4 1.1Change in estimate (0.4) - Accretion expense 0.1 -

Obligations at end of year 2.2 1.1 Asset retirement obligations arise from obligations to retire the wind and solar farm assets at the end of the project life. The Companies estimate that the undiscounted amount of expected cash flows required to settle the obligations will be $73.4 million (2009 - $5.0 million) to be settled between 2058 and 2060. The asset retirement obligation has been discounted using the credit-adjusted risk-free rate of 7.4% (2009 - 6.1%).

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7. EQUITY COMMON SHARES The authorized share capital of 1682399 and ERIC consist of an unlimited number of common shares. 1682399 is also authorized to issue an unlimited number of preferred shares. As at December 31, 2010 and 2009, no preferred shares were issued and outstanding. Common shares issued and outstanding are as follows:

ERIC 1682399 Number of

Shares AmountNumber of

Shares Amount Total

Amount(millions of Canadian dollars except number of shares) Balance at December 31, 2008 26,550 0.1 9,087,806 9.1 9.2 Common shares issued 24,129 - - - - Balance at December 31, 2009 50,679 0.1 9,087,806 9.1 9.2 Common shares issued 2,449,321 2.4 35,000 35.0 37.4

Balance at December 31, 2010 2,500,000 2.5 9,122,806 44.1 46.6 PARTNERS’ EQUITY The Talbot LP and ERIP partnerships are both authorized to issue an unlimited number of partnership units. Partnership units outstanding are as follows:

Talbot LP ERIP

(millions of Canadian dollars except number of units)

Number of Units Amount

Number of Units Amount

Total Amount

Balance at December 31, 2008 - - 414,410,571 417.4 417.4 Capital contribution 92,757,740 92.8 90,820,015 91.1 183.9

Balance at December 31, 2009 92,757,740 92.8 505,230,586 508.5 601.3 Capital contribution 171,596,336 171.6 633,097,669 633.8 805.4 Partnership distribution - - (327,328,255) (364.2) (364.2)Balance at December 31, 2010 264,354,076 264.4 811,000,000 778.1 1,042.5

8. RISK MANAGEMENT MARKET PRICE RISK The Companies’ earnings, cash flows and OCI are subject to movements in foreign exchange rates and interest rates (collectively, market price risk). Formal risk management policies, processes and systems have been designed to mitigate these risks. The following summarizes the types of market price risks to which the Companies are exposed and the risk management instruments used to mitigate them. Foreign Exchange Risk The Companies have exposure to foreign exchange rate variability related to an operations and services agreement denominated in United States dollars. This exposure has been hedged by entering into foreign exchange forward contracts. Interest Rate Risk The Companies’ exposure to short-term interest rate variability is limited as loans to and from affiliates are at fixed rates (Note 13). With respect to exposure to variability in longer term interest rates, the Companies do not typically manage the fair value of its affiliate loans.

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QUALIFYING DERIVATIVE INSTRUMENTS The Companies have entered into the following foreign exchange swaps to manage fluctuations in foreign exchange rates.

December 31, 2010 (millions of Canadian dollars unless otherwise noted) Notional

Principal Derivative or Quantity Liability Maturity

Foreign exchange swaps 22.2 (1.0) 2019-2020

December 31, 2009 (millions of Canadian dollars unless otherwise noted) Notional

Principal Derivative or Quantity Liability Maturity

Foreign exchange swaps 5.7 (0.1) 2019

LIQUIDITY RISK Liquidity risk is the risk that the Companies will not be able to meet their financial obligations, including commitments (Note 14) as they become due. In order to manage this risk, the Companies forecast the cash requirements over the near and long term to determine whether sufficient funds will be available. The Companies’ primary source of liquidity and capital resources are funds generated from operations, parent and partner contributions, and loans from affiliates. CREDIT RISK Credit risk relates to the possibility that a loss may occur from counterparty’s failure to comply with its contractual requirements. The maximum exposure to credit risk is represented by the carrying amounts of cash and cash equivalents, accounts receivable and other, and loan to affiliate. The Companies have minimal credit risk related to cash and cash equivalents as these amounts are held with large Canadian financial institutions. Credit risk related to receivables is mitigated through credit exposure limits and contractual requirements. Substantially all of the Companies’ trade receivables are owing from the Ontario Power Authority. The Ministry of Energy of the Province of Ontario, which currently holds an investment grade credit rating, will honor Ontario Power Authority’s obligations under the related power purchase agreements. Credit risk associated with loans to affiliates is mitigated by ensuring loans are only extended to wholly-owned subsidiaries of Enbridge, the Companies’ ultimate parent company, which is a high creditworthy counterparty.

9. FAIR VALUE OF FINANCIAL INSTRUMENTS FAIR VALUE OF FINANCIAL INSTRUMENTS The fair value of financial instruments reflects the Companies' best estimates of market value based on generally accepted valuation techniques or models and supported by observable market prices and rates. The fair value of financial instruments other than derivatives represents the amounts that would have been received from or paid to counterparties to settle these instruments at the reporting date. The fair value of cash and cash equivalents, accounts receivable and other and accounts payable and other, approximate their cost due to their short period to maturity. Affiliate loans result from related party transactions and are carried at historical cost; no fair value has been determined.

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FAIR VALUE OF DERIVATIVES The Companies categorize their derivative liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. All derivative liabilities have been valued using Level 2 inputs. There are no derivatives valued using Level 1 or Level 3 inputs. Level 2 valuations include non-exchange traded derivatives such as over-the counter foreign exchange forward contracts for which observable inputs can be obtained. Level 2 includes derivative valuations determined using directly or indirectly observable inputs other than quoted prices included within Level 1. Derivatives in this category are valued using models or other industry standard valuation techniques derived from observable market data. Such valuation techniques include inputs such as quoted forward prices, time value, volatility factors and broker quotes that can be observed or corroborated in the market for the entire duration of the derivative. Foreign exchange contracts categorized as Level 2 derivative liabilities measured at fair value totaled $1.0 million (2009 - $0.1 million) at December 31, 2010, with $0.1 million (2009 - nil) included in accounts payable and other and $0.9 million (2009 - $0.1 million) included in other long-term liabilities.

10. CAPITAL DISCLOSURES

The Companies define capital as equity, excluding accumulated other comprehensive loss (AOCL) and loans from affiliates, less cash and cash equivalents. The Companies’ capital is calculated as follows: December 31, 2010 2009(millions of Canadian dollars) Loans from affiliate 9.1 13.1 Equity1 1,138.8 632.7 Cash and cash equivalents (11.0) (1.3) 1,136.9 644.5 1 Excludes AOCL. The Companies’ objective when managing capital is to maintain flexibility among: enabling the businesses to operate at the highest efficiency while maintaining safety and reliability; providing liquidity for growth opportunities; and providing acceptable returns to its shareholders and partners. Capital is available generally through intercompany debt and equity transactions with Enbridge or other related entities.

11. INCOME TAXES INCOME TAX RATE RECONCILIATION Year ended December 31, 2010 2009 (millions of Canadian dollars) Earnings before income taxes 27.1 8.8 Combined statutory income tax rate 31.0% 33.5%Income taxes at statutory income tax rate 8.4 2.9 Decrease from: Non-taxable partnership income (8.8) (3.2) Income taxes (0.4) (0.3)Effective income tax rate (1.5%) (3.4%)

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COMPONENTS OF FUTURE INCOME TAXES (millions of Canadian dollars) Year ended December 31, 2010 2009 Net future income tax liabilities (assets)

Differences in accounting and tax bases of intangible assets 3.7 3.9 Differences in accounting and tax bases of investment in partnership 0.3 0.3 Non-capital losses (0.7) (0.7) Other (0.3) (0.1)

Net future income tax liability 3.0 3.4 At December 31, 2010, the Companies have $3.5 million (2009 - $2.3 million) in unused tax loss carryforwards which will start to expire in 2015 and beyond.

12. CHANGES IN NON-CASH WORKING CAPITAL Year ended December 31, 2010 2009 (millions of Canadian dollars) Accounts receivable and other (0.3) (12.7) Accounts payable and other 9.8 14.4 9.5 1.7 Related to Operating activities (5.3) (0.5) Investing activities 14.8 2.2 9.5 1.7

13. RELATED PARTY TRANSACTIONS All related party transactions occur in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Affiliates refer to Enbridge Inc. and companies that are either directly or indirectly owned by Enbridge Inc.

INTERCORPORATE SERVICES The Companies receive certain administrative and treasury services from affiliates. These services, which are charged at cost in accordance with service agreements or which reflect normal commercial trade terms, were $9.1 million for the year ended December 31, 2010 (2009 - $1.8 million). INTERCORPORATE LOANS AND BALANCES Loan to Affiliate The following demand loan to an affiliate is evidenced by a formal loan agreement. December 31, 2010 2009 (millions of Canadian dollars) Interest Rate Amount Interest Rate Amount Enbridge Pipelines (Athabasca) Inc. 6.0% 35.0 - -

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Loans from Affiliate The following demand loans from Enbridge Inc. are evidenced by formal loan agreements. December 31, 2010 2009 (millions of Canadian dollars) Interest Rate Amount Interest Rate Amount Enbridge Inc. - - 5.75% 4.0Enbridge Inc. 5.0% 8.1 5.75% 8.1Enbridge Inc. 5.0% 1.0 5.75% 1.0 At December 31, 2010, accounts payable and other included $2.6 million (2009 - $1.4 million) due to affiliates.

14. COMMITMENTS Payments due for contractual obligations over the next five years and thereafter are as follows:

Total Less than 1 year

1-3 years

3-5 years

After 5 years

(millions of Canadian dollars) Talbot Wind Farm Capital Commitment 12.3 12.3 - - -Maintenance Commitments 30.3 5.2 8.1 8.3 8.7Land Lease Commitments 11.3 0.6 1.2 1.2 8.3Total Contractual Obligations 53.9 18.1 9.3 9.5 17.0

In addition to the fixed payments for the land lease commitments disclosed above, Talbot Windfarm also has a variable lease payment obligation based on 1.25% of revenues.

15. SUBSEQUENT EVENTS In March 2011, ERIP entered into a seven-year agreement with a vendor to perform all operating and maintenance activities on its wind farms. Under this agreement, ERIP is expected to pay annual operating and maintenance expenses of approximately $6.4 million.

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ENBRIDGE INCOME FUNDUNAUDITED PRO-FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAS AT JUNE 30, 2011


Renewable Entities

Pro-forma Adjustments Notes

Pro-forma Consolidated


AssetsCurrent assets Cash and cash equivalents 26.8 18.2 (18.2) 3(a) 26.8 Accounts receivable and other 56.8 19.8 (0.1) 3(a) 76.5 Loan to affiliate - 35.0 (35.0) 3(a) -

83.6 73.0 (53.3) 103.3Property, plant and equipment, net 1,294.9 1,076.7 - 2,371.6Intangible assets 80.3 16.8 254.6 3(b) 351.7Goodwill 308.1 - 83.1 3(b) 391.2Deferred amount and other assets 194.0 - - 194.0Future income taxes 4.1 - - 4.1

1,965.0 1,166.5 284.4 3,415.9

LiabilitiesCurrent liabilities Accounts payable and accrued liabilities 43.8 6.9 (1.7) 3(a) 62.1

3.6 3(i)0.2 3(j)9.3 3(k)

Loans from affiliate - 9.1 (9.1) 3(a) - Distributions payable 25.1 - - 25.1 Current portion of non-recourse long-term debt 37.6 - - 37.6

106.5 16.0 2.3 124.8Long-term debt 455.0 - 655.0 3(f) 1,110.0Non-recourse long-term debt 666.0 - - 666.0ECT preferred units 90.7 - 75.2 3(h) 165.9Long-term liabilities 22.1 - 1.3 3(j) 23.4Asset retirement obligations 14.5 2.3 - 3(c) 16.8Future income taxes 150.7 2.9 209.0 3(d) 362.6

1,505.5 21.2 942.8 2,469.5

Equity Trust units 333.4 - 274.0 3(g) 598.1

(9.3) 3(k) ECT preferred units – series 1 583.7 - - 583.7 ECT preferred units – series 2 - - 225.8 3(h) 225.8 Common shares - 46.6 (27.3) 3(a) -

(19.3) 3(e) Partners’ equity - 1,013.2 (15.2) 3(a) -

(998.0) 3(e) Retained earnings (deficit) (434.1) 85.5 (85.5) 3(e) (437.7)

(3.6) 3(i) Accumulated other comprehensive loss (23.5) - 1.5 3(e) (23.5)

(1.5) 3(j)459.5 1,145.3 (658.4) 946.4

1,965.0 1,166.5 284.4 3,415.9See accompanying notes to the unaudited pro-forma consolidated financial statements.

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ENBRIDGE INCOME FUNDUNAUDITED PRO-FORMA CONSOLIDATED STATEMENT OF EARNINGSFOR THE SIX MONTHS ENDED JUNE 30, 2011


Renewable Entities




Revenue 172.0 70.8 - 242.8Expenses Operating and maintenance 49.8 11.0 - 60.8 Management and administrative 6.5 - - 6.5 Depreciation and amortization 55.7 23.7 4.9 4(a) 84.3

112.0 34.7 4.9 151.660.0 36.1 (4.9) 91.2

Other income 1.9 - - 1.9Interest expense (36.0) (0.4) (1.0) 4(b) (37.4)

0.2 4(c) 0.2(19.7) 4(d) (19.7)(2.6) 4(e) (2.6)

25.9 35.7 (28.0) 33.6Income taxes (2.3) 0.1 7.8 4(f) 5.6Earnings 23.6 35.8 (20.2) 39.2

See accompanying notes to the unaudited pro-forma consolidated financial statements.

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ENBRIDGE INCOME FUNDUNAUDITED PRO-FORMA CONSOLIDATED STATEMENT OF EARNINGSFOR THE YEAR ENDED DECEMBER 31, 2010


Renewable Entities




Revenue 328.1 67.7 - 395.8Expenses Operating and maintenance 110.4 11.8 - 122.2 Management and administrative 11.3 - - 11.3 Depreciation and amortization 94.3 26.0 10.2 4(a) 130.5

216.0 37.8 10.2 264.0112.1 29.9 (10.2) 131.8

Other income 0.4 - - 0.4Interest expense (56.9) (2.8) (0.1) 4(b) (59.8)

0.5 4(c) 0.5(39.3) 4(d) (39.3)

(4.9) 4(e) (4.9)ECT preferred unit distributions (43.8) - - (43.8)

11.8 27.1 (54.0) (15.1)Income taxes 0.8 0.4 15.1 4(f) 16.3Earnings 12.6 27.5 (38.9) 1.2

See accompanying notes to the unaudited pro-forma consolidated financial statements.

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ENBRIDGE INCOME FUND NOTES TO UNAUDITED PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS AS AT AND FOR THE SIX MONTHS ENDED JUNE 30, 2011 AND FOR THE YEAR ENDED DECEMBER 31, 2010

1. ACQUISITION OF RENEWABLE ENTITIES

In May 2011, Enbridge Income Fund Holdings Inc. (ENF) and Enbridge Income Fund (the Fund) received a proposal from Enbridge Inc. (Enbridge), pursuant to which Enbridge would transfer Talbot Windfarm GP Inc., Talbot Windfarm LP, Enbridge Renewable Energy Infrastructure Canada Inc., 1682399 Ontario Corp., Enbridge Renewable Energy Infrastructure Limited Partnership (ERIP) and ERIP’s wholly-owned subsidiary, Ontario Sustainable Farms, Inc. (collectively, the Renewable Entities) to the Fund (the Transaction). In September 2011, following review by a joint special committee of independent trustees and directors, the respective boards of the Fund and ENF approved and recommended that the shareholders of ENF vote in favour of the Transaction for an aggregate value of $1.23 billion.

The Transaction is subject to all necessary approvals, including approval by regulators and ENF’s shareholders other than Enbridge. Upon completion of the Transaction, the Renewable Entities will become indirect, wholly-owned subsidiaries of the Fund.

The accompanying unaudited pro-forma consolidated statement of financial position as at June 30, 2011 and unaudited pro-forma consolidated statements of earnings for the six months ended June 30, 2011 and the year ended December 31, 2010 (collectively, the Pro-Forma Statements) have been prepared by management for inclusion in a Management Information Circular of ENF dated September 13, 2011 (the Circular) in connection with the special meeting of the shareholders of ENF to approve the Transaction, as well as for the purpose of Business Acquisition Report filings.

2. BASIS OF PRESENTATION

The Pro-Forma Statements have been prepared in accordance with Part V – Pre-changeover accounting standards (Part V or Canadian GAAP) of the Canadian Institute of Chartered Accountants Handbook.Accounting policies used in the preparation of the Pro-Forma Statements are consistent with those disclosed in the audited consolidated financial statements for the Fund as at and for the year ended December 31, 2010 and in the unaudited interim consolidated financial statements as at and for the six months ended June 30, 2011. The unaudited pro-forma consolidated statement of financial position gives effect to the transactions described in Note 3 as if they had occurred on June 30, 2011 and the unaudited pro-forma consolidated statements of earnings give effect to the transactions outlined in Note 4 as if theyhad occurred on January 1, 2010. All amounts are expressed in Canadian dollars.

The Pro-Forma Statements have been prepared from, and should be read in conjunction with, the following financial statements, which are included in the Circular or available on SEDAR at www.sedar.com.

The audited consolidated financial statements of the Fund as at and for the year ended December 31, 2010;

The unaudited interim consolidated financial statements of the Fund as at and for the six months ended June 30, 2011;

The audited combined financial statements of the Renewable Entities as at and for the year ended December 31, 2010; and

The unaudited combined financial statements of the Renewable Entities as at and for the six months ended June 30, 2011.

The Pro-Forma Statements are presented for illustrative purposes only and may not be indicative of the financial results or results of operations that actually would have occurred if the events reflected therein had been in effect on the dates indicated or the results which may have been obtained in the future. In

5

preparing the Pro-Forma Statements, no adjustments have been made to reflect the potential operating synergies and administrative cost savings that could result from the combination of the Fund and the Renewable Entities.

3. PRO-FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION ASSUMPTIONS AND ADJUSTMENTS

The Fund expects to finance the Transaction with proceeds from the issuance of common trust units ofthe Fund (Fund Units), Enbridge Commercial Trust preferred units (ECT Preferred Units) and a long-term loan from Enbridge, a related party. The loan from Enbridge will be repayable at any time, in whole or in part, and will be unsecured and subordinate to all external debt issued by the Fund.

The Transaction will be accounted for as a business combination, with the Fund being the acquirer for accounting purposes and, accordingly, the assets and liabilities are recorded at their fair values at the acquisition date.

The table below reflects management’s preliminary assessment of the net assets acquired and liabilities assumed. The purchase price allocation is preliminary and is subject to change due to the fair value of the Renewable Entities’ assets and liabilities at the closing date of the Transaction and the receipt of any additional information with respect to the valuation of certain assets and liabilities, and changes in the Fund’s valuation estimates that may be made between now and the time of the final purchase price allocation. These changes will not be known until after the closing date of the Transaction and may differ materially from the amounts recorded in these Pro-Forma Statements.

For the purposes of the Pro-Forma Statements, the fair value of assets acquired and liabilities assumed have been allocated as follows:

Purchase Price (millions of Canadian dollars)Long-term loan from Enbridge 655.0Fund Units to be issued (14,616,000 units at $18.75 per unit) 274.0ECT Preferred Units (16,051,000 units at $18.75 per unit) 301.0

1,230.0

Preliminary allocation of the Purchase Price (millions of Canadian dollars)

Working capital 14.3Property, plant and equipment 1,076.7Intangible assets 271.4Goodwill 83.1Asset retirement obligation (2.3)Long-term liabilities (1.3)Future income taxes (211.9)

1,230.0

The purchase price allocation includes a number of intangible assets including a contract, leases, environmental assessments and a generator license, which were acquired from an indirect subsidiary of Enbridge on August 5, 2011, at a fair market value of $1.3 million, in connection with the Transaction.

(a) In connection with the Transaction, the Renewable Entities will settle in full all outstanding loans to and from affiliates, including affiliate trade balances. Additionally all surplus cash in the Renewable Entities will be paid out through capital distributions.

(b) The Renewable Entities’ intangible assets and goodwill have been increased by $254.6 millionand $83.1 million, respectively, to reflect the estimated fair value of the acquired net assets on June 30, 2011.

6

(c) Asset retirement obligations assumed as a result of the Transaction have been measured based on the assumptions and terms consistent with those currently used by the Fund; that is, the liability is based on estimates established by current legislation, initially measured at fair value and capitalized to property, plant and equipment as an asset retirement cost. No material adjustments to asset retirement obligations are expected as a result of the Transaction.

(d) The future income tax liability of $2.9 million recorded by the Renewable Entities has been removed, and a future income tax liability of $211.9 million has been recorded to reflect the temporary differences resulting from the Transaction, calculated using a statutory tax rate of 26 percent.

(e) Elimination of the Renewable Entities’ equity accounts as a result of the Transaction.

(f) Long-term debt has been increased by $655.0 million to reflect the issuance of a loan from Enbridge to partially finance the Transaction. The loan is assumed to be repayable in ten years and is subordinate to all external debt issued by the Fund.

(g) The Fund’s trust unit equity has increased by $274.0 million to reflect the issuance of Fund Units.

(h) The Fund’s ECT Preferred Units equity and liability accounts have increased by $225.8 and $75.2 million, respectively, to reflect the issuance of ECT Preferred Units. The ECT Preferred Units mature on June 30, 2033, at which time all ECT Preferred Units must be redeemed at a price of $18.75 per unit. The holders of the ECT Preferred Units have an exchange right which allows for an exchange of the ECT Preferred Units for Fund Units on a one-for-one basis at any time prior to redemption. The fair value of the liability component of the ECT Preferred Units has been discounted using a discount rate of 6.5% and an accretion period ending on June 30, 2033. The residual amount has been reflected as equity.

(i) Accounts payable have been increased by $3.6 million to reflect an accrual for transaction costs which are expected to be incurred by the Fund.

(j) The combined financial statements of the Renewable Entities at June 30, 2011 have been prepared using accounting standards for private enterprises as set out in Part II (ASPE or Part II) of the CICA Handbook. Under Part II gains and losses on cash flow hedges are not recorded in earnings until realized, whereas Part V requires recognition of unrealized fair value changes in other comprehensive income. Accounts payable and accrued liabilities have increased by $0.2 million, long-term liabilities been increased by $1.3 million and other comprehensive income has decreased by $1.5 million to record the fair value of qualifying cash flow hedges under Part V.

(k) The Fund will reimburse ENF for equity issuance costs which are expected to be $9.3 million. The $9.3 million reimbursement has been recorded as an increase to accounts payable.

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4. PRO-FORMA CONSOLIDATED STATEMENT OF EARNINGS ASSUMPTIONS AND ADJUSTMENTS

(a) Depreciation and amortization expense has been increased by $4.9 million for the six months ended June 30, 2011 and $10.2 million for the year ended December 31, 2010 to reflect the effect of the pro-forma adjustments to the carrying value of intangible assets outlined in Note 3(b) above.

(b) In connection with the Transaction, a $35 million loan to affiliate, plus accrued interest, will be settled. Other income has been decreased by $1.0 million and $0.1 million for the six months ended June 30, 2011 and the year ended December 31, 2010, respectively, to reflect the elimination of the interest income related to this loan receivable.

(c) In connection with the Transaction, loans from an affiliate totaling $9.1 million, plus accrued interest, will be settled. Interest expense has been decreased by $0.2 million and $0.5 million for the six months ended June 30, 2011 and the year ended December 31, 2010, respectively, to reflect the elimination of the interest expense related to this loan payable.

(d) Interest expense has been increased by $19.7 million and $39.3 million for the six months ended June 30, 2011 and the year ended December 31, 2010, respectively, to reflect interest related to the incremental debt as described in Note 3(f). Interest costs were assumed to be at 6 percent in accordance with the terms of the Transaction.

(e) The $75.2 million liability related to the newly issued ECT Preferred Units (Note 3(h)) is to be accreted at 6.5% per annum. The $2.6 million and $4.9 million of accretion for the six months ended June 30, 2011 and the year ended December 31, 2010, respectively, has been recorded in interest expense.

(f) Income tax recoveries of $7.8 million and $15.1 million have been recorded for the six months ended June 30, 2011 and the year ended December 31, 2010, respectively, to reflect the tax effect on the pro-forma adjustments to the statements of earnings described above, at the statutory tax rate of 28% percent.

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ENBRIDGE INCOME FUND HOLDINGS INC.UNAUDITED PRO-FORMA STATEMENT OF FINANCIAL POSITIONAS AT JUNE 30, 2011

Enbridge Income Fund Holdings Inc.

Pro-forma Adjustments Notes Pro-forma

(thousands of Canadian dollars)

AssetsCurrent assets

Cash and cash equivalents 1,459 - 1,459Accounts receivable 26 - 26Distributions receivable 8,693 - 8,693

10,178 - 10,178Investment in Enbridge Income Fund 476,621 274,050 3(a) 741,371

(9,300) 3(c)486,799 264,750 751,549

Liabilities and shareholders’ equityCurrent liabilities

Accounts payable and accrued liabilities 26 - 26Income taxes payable 2,904 - 2,904Dividends payable 7,236 - 7,236

10,166 - 10,166Deferred income taxes 4,918 - 4,918

15,084 - 15,084Shareholders’ equity

Share capital 251,250 274,050 3(b) 516,000(9,300) 3(c)

Share premium 192,458 - 192,458Deficit (792) - (792)Accumulated other comprehensive

income 28,799 - 28,799471,715 264,750 736,465486,799 264,750 751,549

See accompanying notes to the unaudited pro-forma financial statements.

2

ENBRIDGE INCOME FUND HOLDINGS INC.UNAUDITED PRO-FORMA STATEMENT OF EARNINGSFOR THE SIX MONTHS ENDED JUNE 30, 2011



(thousands of Canadian dollars, except per share amounts)

Distribution income 17,386 - 17,386Income tax (3,706) - (3,706)Earnings 13,680 - 13,680Basic and diluted earnings per common share 0.54 4(a) 0.34See accompanying notes to the unaudited pro-forma financial statements.

3

ENBRIDGE INCOME FUND HOLDINGS INC.UNAUDITED PRO-FORMA STATEMENT OF EARNINGS FOR THE PERIOD FROM MARCH 26, 2010, DATE OF INCORPORATION, TO DECEMBER 31, 2010



(thousands of Canadian dollars, except per share amounts)Earnings - - -Basic and diluted earnings per common share - - 4(a) -See accompanying notes to the unaudited pro-forma financial statements.

4

ENBRIDGE INCOME FUND HOLDINGS INC.NOTES TO UNAUDITED PRO-FORMA FINANCIAL STATEMENTSAS AT AND FOR THE SIX MONTHS ENDED JUNE 30, 2011 AND FOR THEPERIOD ENDED DECEMBER 31, 2010

1. ACQUISITION OF RENEWABLE ENTITIES

In May 2011, Enbridge Income Fund Holdings Inc. (ENF or the Company) and Enbridge Income Fund (the Fund) received a proposal from Enbridge Inc. (Enbridge), pursuant to which Enbridge would transfer Talbot Windfarm GP Inc., Talbot Windfarm LP, Enbridge Renewable Energy Infrastructure Canada Inc., 1682399 Ontario Corp., Enbridge Renewable Energy Infrastructure Limited Partnership (ERIP) and ERIP’s wholly-owned subsidiary Ontario Sustainable Farms, Inc. (collectively, the Renewable Entities) to the Fund (the Transaction). In September 2011, following review by a joint special committee of independent trustees and directors, the respective boards of the Fund and ENF approved and recommended that the shareholders of ENF vote in favour of the Transaction for an aggregate value of $1.23 billion.

The Transaction is subject to all necessary approvals, including approval by regulators and ENF shareholders other than Enbridge. Upon completion of the Transaction, the Renewable Entities will become indirect, wholly-owned subsidiaries of the Fund.

The accompanying unaudited pro-forma statement of financial position as at June 30, 2011 and unaudited pro-forma statements of earnings for the six months ended June 30, 2011 and the year ended December 31, 2010 (collectively, the Pro-Forma Statements) have been prepared by management for inclusion in a Management Information Circular of ENF dated September 13, 2011 (the Circular) in connection with the special meeting of the shareholders of ENF to approve the Transaction, as well as for purposes of Business Acquisition Report filings.

2. BASIS OF PRESENTATION

The Pro-Forma Statements have been prepared in accordance with International Financial Reporting Standards (IFRS). Accounting policies used in the preparation of the unaudited pro-forma statement of financial position as at June 30, 2011 and the unaudited pro-forma statement of earnings for the six months ended June 30, 2011 are consistent with those disclosed in the financial statements for the Company as at and for the six months ended June 30, 2011. The accounting policies used in the preparation of the unaudited pro-forma statement of earnings for the year ended December 31, 2010 are consistent with the accounting policies used in the preparation of comprehensive income as reported under IFRS for the year ended December 31, 2010 as disclosed in note 10 of the unaudited financial statements of ENF as at and for the six months ended June 30, 2011.

Amounts are stated in thousands of Canadian dollars, unless otherwise indicated.

The unaudited pro-forma statement of financial position gives effect to the transactions described in Note 3 as if they occurred on June 30, 2011 and the unaudited pro-forma statements of earnings give effect to the transactions outlined in Note 4 as if they occurred on January 1, 2010.

The Pro-Forma Statements have been prepared from, and should be read in conjunction with, the following financial statements, which are available on SEDAR at www.sedar.com.

The audited financial statements of the Company as at and for the year ended December 31, 2010; The unaudited interim financial statements of the Company as at and for the six months ended June

30, 2011.

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The Pro-Forma Statements are presented for illustrative purposes only and may not be indicative of the financial results or results of operations that actually would have occurred if the events reflected therein had been in effect on the dates indicated or the results which may have been obtained in the future.

In preparing the Pro-forma Statements, no adjustments have been made to reflect the potential increase in distribution income or potential fair value changes in the Company’s investment in the Fund that could result from the Transaction.

3. PRO-FORMA STATEMENT OF FINANCIAL POSITION ASSUMPTIONS AND ADJUSTMENTS

(a) The Fund expects to partially finance the Transaction with proceeds from the issuance of common trust units of the Fund (Trust Units) in the amount of $274,050 to ENF. ENF will acquire 14,616,000 Trust Units at a price of $18.75 per unit.

(b) In order to finance the purchase of the Trust Units, ENF plans to issue common shares to the public for gross proceeds of $219,506. In conjunction with the public equity offering, ENF also plans to issue common shares to Enbridge for gross proceeds of $54,544.

(c) Equity issue costs of $9,300 are expected to be incurred in connection with these transactions and will be reimbursed by the Fund.

4. PRO-FORMA STATEMENT OF EARNINGS ASSUMPTIONS AND ADJUSTMENTS

(a) At a price of $18.75 per common share it is expected that 11,707,000 common shares will be issued to the public and 2,909,000 common shares will be issued to Enbridge, increasing the weighted average number of common shares outstanding to 39,741,001.

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ENBRIDGE INCOME FUND HOLDINGS INC.€¦ · ENBRIDGE INCOME FUND HOLDINGS INC. Special Meeting of...

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