POLITICS

No sign of promised loan guarantee for Lower Churchill

10/31/2012 05:24 EDT | Updated 12/31/2012 05:12 EST
Nova Scotia Premier Darrell Dexter urged the federal government on Tuesday to spell out the terms of a long promised federal loan guarantee needed to help the proposed $7.4-billion Lower Churchill hydroelectric project.

But the Conservatives offered nothing more than a standard response.

"Our government is committed to providing a loan guarantee for the Lower Churchill project," Christopher McCluskey, a press aide to federal Natural Resources Minister Joe Oliver, said in a statement emailed to CBC News.

"Analysis shows that this project remains economically viable, will substantially reduce GHG emissions and create jobs across Atlantic Canada. We will continue to review the project in consultation with our independent financial advisor."

Dexter said the federal loan guarantee will be a key factor in what the project ends up costing Nova Scotia ratepayers, who are set to pick up 20 per cent of the cost of the subsea cable in return for 20 per cent of the electricity when it starts arriving in 2017.

"I want to stress we do need to have information on the federal loan guarantee," Dexter told reporters at the Nova Scotia legislature on Tuesday, where the Muskrat Falls project was the subject of an emergency debate.

"There are many things that are important about it. Like the length of the term, how many years does the loan guarantee affect, what amount of money are they prepared to secure. All of these things when you go to the market in terms of the certainty associated for investors in terms of access to capital are going to be important."

Latest cost estimates up by $1.2 billion

On Tuesday, Newfoundland Premier Kathy Dunderdale released the latest cost estimates for the project — $7.4 billion, up from an initial projection of $6.2 billion.

Halifax-based Emera Inc. — the parent company of Nova Scotia Power Inc. — is a partner in the project and is responsible for the Maritime Link, an undersea cable that will bring electricity from Newfoundland into Cape Breton.

That undersea cable was originally estimated to cost $1.2 billion. Dunderdale did not provide an updated cost estimate for the Maritime Link.

Even so, Emera Inc.'s share of the overall project cost has also been revised by an additional $200 million. Emera Inc. said it will not have final figures until the federal loan guarantee comes through.

"We will be updating the Maritime Link portion and that involves finalizing the work with the federal government on the federal loan guarantee," said Sasha Irving, a spokesperson for Emera Inc.

"Once we have that, we'll have that cost to add to Newfoundland's updated cost today and it will be 20 per cent of that total cost."

Irving said the company expects to spell out its costs when it files its plan with the Nova Scotia Utility and Review Board later this fall.