December 8, 2022

The Queens County Citizen

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Muscat Falls borrowed $ 1 billion from CIBC

Muscat Falls borrowed $ 1 billion from CIBC

(St. John) Bank financing secured for Ottawa’s third loan guarantee to support the Muscat Falls hydropower mega project in Newfoundland and Labrador.

Posted 12:22 pm

The Provincial Crown Corporation said on Thursday that CIBC had taken out a $ 1 billion loan guaranteed by the federal government for a delayed hydropower project.

Newfoundland and Labrador Hydro offered a loan through a range of CIBC 21 bonds in a news release, with an average effective interest rate of 3.38%.

Part of the loan guarantee is a $ 5.2 billion bailout for the project. The plan aims to protect consumers from the huge increases in electricity rates required to pay bills when the project comes to full production.

The interim agreement between Ottawa and the province was first announced last July. Provides annual payments from Ottawa to the province, equivalent to net income from the St. John’s Hypernia Oil Project in Canada, totaling $ 3.2 billion.

The Muscat Falls Mega Project, located on the lower Churchill River in Labrador, was first approved in 2012 at an estimated cost of $ 7.4 billion. But by September 2020 the bill had reached 13.1 billion, but reports suggest that the project could take another year to become fully operational.

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