12/10/2013 03:24 EST | Updated 02/09/2014 05:59 EST

Muskrat Falls financing in place, says Kathy Dunderdale

Newfoundland and Labrador Premier Kathy Dunderdale has announced that all the financing for the Muskrat Falls hydroelectric megaproject is now in place. 

The province will get a $5-billion loan, with a 40-year term at 3.8 per cent interest. 

"The order of magnitude of this financing cannot be underestimated. This bond placement is one of the largest in Canadian history," said Dunderdale.   

Dunderdale said TD Securities and Goldman Sachs were co-lead arrangers of the loan, and along with a syndicate of financial institutions, raised the $5 billion required to fund the project. 

"The federal loan guarantee has been finalized," said Rob Moore, the New Brunswick MP who acts as Newfoundland and Labrador's cabinet representative. 

"With this step, our government has delivered on a commitment for Atlantic Canada," said Moore.  

Federal loan guarantee key

The federal loan guarantee has been contingent to securing the low interest rate for the $5-billion loan. That interest rate,  Dunderdale said, should save electricity customers in the province more than one billion dollars. 

"In Nova Scotia alone, it will mean a savings of $250-million to rate payers," said Nova Scotia's energy minister, Andrew Younger, who was also at Confederation Building for the announcement. 

"The protection of rate payers has been my number-one priority."  

Younger, Moore, and Dunderdale made their remarks in a lobby packed with members of the Dunderdale government, supporters, and a choir.  

The announcement was timed to coincide with supper-hour television news programs in the province, and it was similar to the event the government held for the formal sanctioning of the Muskrat Falls project on Dec. 17, 2012. 

Most expensive capital works project in N.L. history

The project, which will cost at least $7.7-billion, is the most expensive capital works project in the province's history. 

Construction has already started on the Muskrat Falls dam site and the subsea cable route from Labrador to Newfoundland. 

Subsea cables will transmit the power from Labrador to Newfoundland, with the island using 40 per cent of total power produced.

A 20 per cent block of the power is earmarked for Nova Scotia, via an additional set of subsea cables.

Nalcor will look for markets for the remaining 40 per cent of the power. Options include industrial use in Labrador, or sales to other energy markets through Nova Scotia, using Emera's transmission assets.

The construction project is expected to create up to 3,300 jobs at its peak in 2015.