CIB and ITC to invest USD1.35 billion for the 1 GW Connector project in Canada
The Canada Infrastructure Bank (CIB) and ITC Investment Holdings (ITC) have signed an agreement in principle to invest CAD1.7 billion (USD1.35 billion) in the Lake Erie Connector project.
Under the terms of the agreement, the CIB will invest up to CAD 655 million (USD521.51 million) or up to 40% of the project cost. ITC, a subsidiary of Fortis Inc., and private sector lenders will invest up to CAD1.05 billion (USD836.02 million), the balance of the project's capital cost.
The Lake Erie Connector is a proposed 117 kilometre underwater transmission line connecting Ontario with the PJM Interconnection, the largest electricity market in North America.
The 1,000 megawatt, high-voltage direct current connection will help lower electricity costs for customers in Ontario and improve the reliability and security of Ontario's energy grid. The Lake Erie Connector will reduce greenhouse gas emissions and be a source of low-carbon electricity in the Ontario and U.S. electricity markets.
During construction, the Lake Erie Connector is expected to create 383 jobs per year and drive more than CAD300 million (USD238.86 million) in economic activity. Over its life, the project will provide 845 permanent jobs and economic benefits by boosting Ontario's GDP by CAD8.8 billion (USD7 billion).
The CIB anticipates financial close late in 2021, pending final project transmission agreements, with construction commencing soon after. ITC will own the transmission line and be responsible for all aspects of design, engineering, construction, operations and maintenance.
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