NL: Ottawa waiting on Muskrat Falls financials

James McLeod
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The Telegram

It’s been more than eight months since the federal government signed a memorandum of understanding committing to providing a loan guarantee for the $6.2-billion project, but the final guarantee has yet to come through.

Ed Martin, president and CEO of Nalcor Energy — File

[ST. JOHN'S, NL] — Federal Natural Resources Minister Joe Oliver wanted to make it crystal clear: he’s not behind any delays for a Muskrat Falls loan guarantee.

It’s been more than eight months since Oliver signed a memorandum of understanding, committing to providing a loan guarantee for the $6.2-billion project, but the final guarantee has yet to come through.

The federal government wants to assess reams of financial data before it formally gets behind the loan guarantee, and increasingly, it looks like the delays are coming from Nova Scotia utility Emera Energy, which is a partner in the project.

On March 12 in the House of Assembly, Premier Kathy Dunderdale said the province has already turned in its homework on Muskrat Falls.

“The federal government is not awaiting any information from the Province of Newfoundland and Labrador, or from Nalcor,” she said. “The information they are waiting on, Mr. Speaker, is from Emera in Nova Scotia, and I understand that has already been provided or is in the process of being provided.”

A spokesman for Emera refused an interview request on the matter, but sent a statement to The Telegram by email.

“A federal loan guarantee for the Maritime Link initiative is and will continue to be part of confidential negotiations between the parties involved,” spokesman Jeff Myrick said in a statement. “The federal government has already committed to a loan guarantee and has assured us of this commitment repeatedly. We continue to make progress and are confident in the process that has been put in place.”

The loan guarantee would allow both Nalcor and Emera to borrow money using the federal government’s credit rating, which would result in lower interest rates.

Nalcor CEO Ed Martin has said that it will likely mean borrow rates two percentage points lower.

On a $6.2-billion project, that amounts to more than $120 million in potential savings.

When Oliver signed the MOU back in August, it committed that the federal government would turn all of the Muskrat Falls data over to a group of Bay Street financial experts, who would assess the project.

Within eight weeks of getting all the data, the federal government said it would make a final decision on the guarantee.

“It’s quite complex, a lot of moving parts, and to put together a loan guarantee we have to have the full business arrangement,” Oliver said this week. “We’re committed to moving as quickly as possible when we have all the information.”

Oliver’s provincial counterpart, Natural Resources Jerome Kennedy, was out the province and not able to comment Thursday.

Organizations: Emera Energy, Province of Newfoundland and Labrador

Geographic location: Muskrat Falls, Nova Scotia, Ottawa Bay Street

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