Harper announces loan guarantee for Muskrat Falls project

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Prime Minister Stephen Harper. — Canadian Press file photo

The Muskrat Falls project cleared a major hurdle today when Prime Minister Shephen Harper announced the long-awaited federal loan guarantee for the hydroelectric project.

Harper said the project is an "unprecedented opportunity" at a news conference in Happy Valley-Goose Bay.

The federal loan guarantee will lower the costs of borrowing for the proponents, with projected savings of over a billion dollars for ratepayers in Newfoundland and Labrador and Nova Scotia.

In a news release, Harper states that the governments of Canada, Newfoundland and Labrador, and Nova Scotia have agreed on the terms for a federal loan guarantee for the Lower Churchill projects.

He said hese projects will contribute to jobs, growth and long-term prosperity in Newfoundland and Labrador and Nova Scotia.

Harper was accompanied by National Defence Minister Peter MacKay; Peter Penashue, Minister of Intergovernmental Affairs and President of the Queen’s Privy Council for Canada; Premier Kathy Dunderdale; and Nova Scotia Premier Darrell Dexter.

“This loan guarantee will not only create jobs and economic growth for people in Atlantic Canada, but will also provide a stable and sustainable source of energy for the region,” Harper said. “The Lower Churchill projects will receive the support they need to move forward, which will have significant economic benefits as well as environmental gains due to a substantial reduction in greenhouse gas emissions.”

 The federal government is prepared to guarantee project debt to help the proponents finance the following projects: the Muskrat Falls Hydroelectric Generation Station and three transmission projects (Labrador Transmission Interconnection, the Labrador-Island Transmission Link and the Maritime Transmission Link).

The Muskrat Falls facility is expected to generate 4.9 million megawatt-hours (MWh) annually.  In addition to reducing up to 4.5 million tonnes of greenhouse gas emissions annually, which according to estimates is the equivalent of taking 3.2 million cars off the road, the Lower Churchill projects will result in an average of 1,500 jobs during each year of construction with peak employment during construction of approximately 3,100 people. They will also generate $1.9 billion in earnings for the people of Newfoundland and Labrador.

Harper and the two premiers signed the term sheet today.

The term sheet sets out the terms and conditions of the loan guarantee which will be formalized in detailed agreements. With the term sheet signed, the projects’ proponents will now be in a position to engage capital markets to plan and arrange the debt financing for the projects.

The agreement means Ottawa will guarantee project-related debt of up to $6.3 billion for the Lower Churchill River projects. The loan will be guaranteed for a period of 35 to 40 years from the time project debt is raised, which will apply to the construction and operating phases of the projects. 




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Recent comments

  • dan
    November 30, 2012 - 22:59

    ..Way to Go !!..and flip la bird to Quebec ..

  • Blair Brookfield
    November 30, 2012 - 19:36

    Promise made. Promise delivered. Harper is the best choice for the budding energy superpower that NL is becoming. You're delusional if you think this would have been pushed through by the NDP against the wishes of Quebec. It's time we align ourselves with the province of Alberta. Our interests are one and the same.

  • Eli
    November 30, 2012 - 18:28

    Never saw anything so disgusting as Premier Dunderdale. Reveling at what she gained but nationally snubbed by the Prime Minister, turned my stomach. No mention of that load guarantee coming in short by $1-billion dollars. God, what a disgrace!

  • P. Nylimplant
    November 30, 2012 - 18:16

    Looks like Canadian taxpayers on on the hook now too.

  • dupce
    November 30, 2012 - 18:08

    Facts that may put the Muskrat Falls Hydro project into perspective. -Muskrat Falls (1 Dam) will produce 834 MW at a total cost of 7.4B$ (7,400,000,000$), opening date unknown (not started yet). -La Romaine Hydro Project in Quebec which started in 2009 (4 Dams) will cost a total of 6.5B$ (6,500,000,000$), to be finish in 2020. It will produce 1550MW of electricity. If we do a total comparative cost of the two projects per MW: - Muskrat Falls will cost 8,872,901$ (8.9million$) for each Mega Watts produced. - La Romaine will cost 4,174,694$ (4.2million$) for each Mega Watts produced. That is, the Muskrat Falls project will cost 112% more to build for each Mega Watts as compared with La Romaine.

  • Concerned
    November 30, 2012 - 18:07

    Dunderdale said yesterday that she has a team in Ottawa, soley working on the loan guarantee, how is that when she knew nothing about Harper's visit. What happened to her negotiating team, they to, must of forgotten to inform her. Sold out the Province, but, I'll still say its not over until its over.

  • stephen
    November 30, 2012 - 17:54

    I am an even prouder Nler today than ever,and its great to see such a worthy project get going. To all Newfoundlanders on the Rock, please read all you can about Ontarios Green Energy disaster under LIBERAL Dalton Mcguinty with windmills and solar panels. if the liberals were to get back in in Nfld and starts talking this crap,like Ontario it will be a nightmare. Ontarios hydro rates under this Green Energy fiasco double for the ratepayer in 5 yrs. 9 yrs of liberal provincial gov,t has left Ontario in Have Not Status,with 16 billion dollar yearly dificits with scandal after scandal, the Muskrat Falls project is true renewable clean energy,not the liberal propaganda of windmills and solar panels,I live here in Ottawa and its shameful what the Fiberals as they are referred to in Ontario now,have done to bankrupt Ontario and drive out manufacturing jobs by the tens of thousands because companies cannot afford the hydro. read about TIME OF DAY USAGE . 7 billion dolllar Samsung deal. you will get the message loud and clear. Muskrat Falls is a great thing for Nfld.

  • Stevencdn
    November 30, 2012 - 17:50

    where are the savings when the price to produce a kwh is 14 cent...in the usa they pay an average of 10 cents.

  • alfred
    November 30, 2012 - 17:42

    WELL WELL, lets see now. the PQ separtist in QUEBEC plan to fight this loan guarandeed to develop muskrat falls. my question: who side will the federal ndp mp's in quebec be on? will they stand up for canada/newfoundland/labrador and risk all those seats they won, and what about jack harris and ryan cleary in this province. will they stand up for newfoundland/labrador or will they hold party lines and when their quebec leader says jump, they will say how high ?

  • jerome bennett
    November 30, 2012 - 17:09

    Flying all those people to Goose for this IFFY announcement was a complete waste of tax payers money.

  • jim
    November 30, 2012 - 15:45

    WHO-OO, poor liberals/ndp didn't get their own way on this one. i guess the conservative government is not a scrooge afterall.

  • MBC
    November 30, 2012 - 15:42

    Now that's done the project is full steam ahead. Let's give Minister Kennedy a break. Time to turn our attention to Minister Davis for better roads,and Minister Sullivan for better health care.

    November 30, 2012 - 15:14

    FANTASTIC NEWS, jobs for newfoundlanders/labradorians, i can't wait to hear what gerry, scott simms, judy, scotty andrews, jackie, and ryan got to say. great job mr. prime minister for being the statesman you are, for being a great canadian and for putting our nation on the map worldwide. now mr harper please call an early election if possible so we the voters of newfoundland can put our useless MP'S out to pasture.

  • Maurice E. Adams
    November 30, 2012 - 15:13

    "Quebec warns it will fight federal funding" (and who was it said that the Water Management Agreement solved any problems with Quebec?).... see---- http://www.theglobeandmail.com/news/politics/quebec-warns-it-will-fight-federal-funding-of-newfoundland-energy-project/article5842575/

  • Maurice E. Adams
    November 30, 2012 - 15:02

    So if the guarantee is only partial and over only 35-40 years, will that mean Nalcor's take or pay back period/contract locking in ratepayers will be only for 35-40 years instead of the planned 57 years? And will that mean therefore that rate will have to be substantially higher?

    • a business man
      November 30, 2012 - 17:59

      Maurice, while you pose a good question, I for one and fine with either answer. I support MF, regardless of how long we are locked in. I also would be okay if the rate was substantially higher.

  • Don
    November 30, 2012 - 14:30

    Now that's over, lets get on with this very important project which means greater prosperity for all Newfoundlanders.

  • John Smith
    November 30, 2012 - 14:17

    Well, the project didn't need this, but we'll take it I guess...

  • Cyril Rogers
    November 30, 2012 - 14:01

    I guess Mr. Harper's math on this one is about as accurate as it was on the F-35 fighter jets. In other word, completely unrealistic or deceptive or both. Nothing he says or does can be taken at face value.....whether that be Senate reform, fighter jets, omnibus bills, or prorogation of Parliament.

    • John Smith
      November 30, 2012 - 15:00

      wow cyril sneer...is that the best you can do? LOL

  • Cyril Rogers
    November 30, 2012 - 13:56

    I guess Mr. Harper's math on this one is about as accurate as it was on the F-35 fighter jets. In other word, completely unrealistic or deceptive or both. Nothing he says or does can be taken at face value.....whether that be Senate reform, fighter jets, omnibus bills, or prorogation of Parliament.

  • Winston adams
    November 30, 2012 - 13:56

    One billion in savings. John Smith recently said any savings from the feds were not significant.

    • John Smith
      November 30, 2012 - 15:14

      No I did not say it wasn't signifigant...I said it will not affect the viability of the project either way. The NL portion of the guarantee will be about 700 million, because Harper decided to go with the DG3 numbers instead of the DG2 numbers...

  • Joe
    November 30, 2012 - 13:50

    A great day for Newfoundland and Labrador! Good try 2041, all of you ill-hearted fear mongering failed once again. Can't wait for sanction

    • Eli
      November 30, 2012 - 18:31

      Go back to sleep Joe. The farce or sanction as you call it was written in stone 2 years ago.