Enbridge Income Fund to Acquire $1.164 Billion of Crude Oil Storage and Renewable Power Generation Assets from Enbridge Inc.

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OCT 25, 2012

Enbridge Income Fund Holdings Inc. (the "Company") (TSX:ENF) and Enbridge Income Fund (the "Fund") announced today that indirect wholly-owned subsidiaries of the Fund have entered into an agreement to acquire entities which own crude oil storage and renewable energy assets (the "Assets") from Enbridge Inc. (TSX:ENB) (NYSE:ENB) and certain of its indirect wholly-owned subsidiaries (collectively, "Enbridge") for approximately $1.164 billion (the "Transaction"). The Company also announced that to finance its equity investment in the Fund pursuant to the Transaction, it has entered into a bought deal agreement led by RBC Capital Markets and CIBC World Markets Inc. for the sale of an aggregate of 9,597,000 subscription receipts of the Company ("Subscription Receipts") at a price of $23.15 per Subscription Receipt, for gross proceeds of $222.2 million.

As Enbridge is a related party to the Fund and the Company, the Company will seek the approval of the Transaction by its shareholders at a special meeting to be held on December 7, 2012. Subject to completion of the financing and receipt of regulatory and third party approvals, the Transaction is expected to close shortly after receipt of the requisite approval of a majority of the shareholders of the Company.

Assets to be Acquired

The Assets consist of five distinct facilities, comprised of crude oil storage assets in Alberta and renewable power generation assets in Ontario.

The Hardisty Contract Terminals and the Hardisty Storage Caverns provide approximately 11 million barrels of total crude oil storage capacity located above and below ground, representing one of the largest contract crude oil terminals in North America. The crude oil storage facilities are currently operating under long term take-or-pay storage contracts with creditworthy counterparties for the full storage capacity. The storage contracts have weighted average remaining terms of approximately 22 years and generate a stable cash flow stream as revenue generated by these storage contracts is mostly derived from fixed fees charged for a specified amount of storage capacity.

The renewable energy assets consist of the Greenwich Wind Project, an on-shore wind project with an installed capacity of 98.9 MW, and the Amherstburg Solar Project and Tilbury Solar Project, both ground mount solar projects with installed capacities of 15 MW and 5 MW, respectively. The renewable energy assets are currently operating under long-term, fixed price power purchase agreements ("PPAs") with the Ontario Power Authority ("OPA") and have full service operating and maintenance contracts with third parties. The weighted average remaining terms of the PPAs exceed 18 years for all three renewable energy assets.

Enbridge, through its affiliates, will continue to manage the crude oil storage and renewable energy assets pursuant to management and administrative services agreements.

Collectively, the Assets are expected to generate within the Fund earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately $97 million per year on average over a long term planning horizon. Certain of the Assets are expected to have tax pools available for accelerated deductions, providing further early-year cash benefits to the Fund.

Benefits of the Transaction

"The prospect of acquiring this portfolio of assets is exciting," noted John Whelen, President, Enbridge Income Fund Holdings Inc. "We believe that these facilities would be a great fit for the Fund. They are all underpinned by long-term fixed price contracts and none have direct exposure to commodity price or foreign exchange fluctuations. If approved by shareholders, the Transaction would substantially scale up and further diversify the Fund's sources of low risk cash flow, reinforcing its value to investors seeking a steady and predictable payout of cash flow from low-risk energy infrastructure assets. On a pro-forma basis, after giving effect to the Transaction, the percentage of total distributable cash flow generated by our Crude Oil Transportation and Storage business would be approximately 40%, while Green Power and Gas Transmission would be approximately 40% and 20%, respectively.

"The Transaction is expected to be accretive to the Company's distributable cash flow immediately and by approximately 4% per share on a sustainable basis," said Mr. Whelen.

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