On Nov. 3, Jim Carr, Canada’s Minister of Natural Resources, announced that the federal government will provide additional loan guarantee support for the Lower Churchill hydroelectric projects in Newfoundland and Labrador.
Canada will guarantee up to an additional C$2.9 billion in debt for the portion of the Lower Churchill projects led by Newfoundland and Labrador Crown corporation Nalcor Energy. The specific conditions of this support will be negotiated with the government of Newfoundland and Labrador and Nalcor Energy in the near future with provisions for commercial terms, including a guarantee fee of 0.5% above the federal rate. The government of Canada will also work with the province to provide immediate relief for its escrow account obligations as well as an extension to the timeline for debt repayment.
The government of Canada will continue to monitor the projects and work closely with the government of Newfoundland and Labrador to protect the interests of Canadian taxpayers.
In keeping with the government of Canada’s long-term plan for infrastructure – including the new commitments of C$81 billion announced in the Fall Economic Statement – and in the context of the Pan-Canadian Framework on Clean Growth and Climate Change, the federal government continues to work with provinces and territories to bring more clean and reliable energy on a smarter, better-connected electricity grid.
“The Lower Churchill projects will make a major contribution to meeting Atlantic Canada’s future energy needs by providing a long-term, reliable and abundant source of clean energy. The Lower Churchill projects are helping the people of Newfoundland and Labrador and will contribute to the achievement of Canada’s carbon emissions reduction targets,” said Carr.
Nalcor Energy proposes to construct hydroelectric facilities at Muskrat Falls and Gull Island, both located on the Churchill River, approximately 30 and 100 kilometers southwest of Happy Valley-Goose Bay, Labrador, respectively. These facilities are expected to result in a total installed capacity of 3,074 MW. Of this, 824 MW are expected from the Muskrat Falls facility and 2,250 MW are anticipated from Gull Island. The project involves the construction and operation of a concrete dam, reservoir and powerhouse at both facilities, as well as the construction of interconnecting transmission lines to connect the facilities with the existing 5,428-MW Churchill Falls Generating Station.
Says the Nalcor website: “The hydroelectric potential of Muskrat Falls and Gull Island make the lower Churchill River in Labrador the best undeveloped hydroelectric source in North America. Together, they have a combined capacity of more than 3,000 megawatts, will be able to provide 16.7 terawatt hours of electricity a year and significantly reduce greenhouse gas emissions – equivalent to taking 3.2 million vehicles off the road each year. The Lower Churchill Project will be developed in two phases: first, Muskrat Falls and then Gull Island.”