Muskrat Falls financing, the nitty gritty...

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I wrote a story for Wednesday’s paper about Muskrat Falls, potential project delays and the financial impact of interest during construction.

This stuff is maddeningly complicated, so I suggest checking out that original story here as a good jumping-off point. But in trying to pull all this stuff together, I had more information than I could possibly fit into a newspaper story. I know there are some very committed Muskrat Falls geeks out there, though, so I’m going to dump the rest of it here and you can pore over it at your pleasure.

First of all, in explaining interest during construction, Nalcor sent me a two-page document attempting to explain it. You can download that document from Google Drive here.

Also, I did a lengthy interview with Ed Martin about this on Tuesday afternoon. I apologize for the poor audio quality. The interview was done on my cell phone, recording using a little doohickey microphone earbud. It’s good enough for transcription, but it’s a long way from radio quality. Anyway, you can listen to that audio here. Here's one that should work for mobile users, BTW, but it's a really big file, so maybe make sure you're connected to wifi or something; I don't want to be responsible for driving your cell phone bill through the roof.

As always, if you’ve got any questions or comments, don’t hesitate to email me at or leave a comment on this blog post.

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Recent comments

  • oh my...
    May 01, 2014 - 14:41

    This interview is truly amazing in Martins efforts to not explain the issue in a clear and concise means. Mc Leod understands the issue. Martin does not want to admit the issue. There is extra interest on the 5 Billion dollar component. It will be included, and capitialized. It will be paid for in a 29 year term. It will result in the charge per year being about 3-5% higher than if the project was not delayed. This means higher unit rates for the first 29 years. Simple. Furthermore, Martin refuses to aknowledge the rate of return on the Equity which must be paid by Nalcor. This is what he calls the AFUDC. It is discussed on the sheet. One of the biggest issues I have had with the Muskrat Falls project is the refusal to recognize the equity as debt. The province are borrowing to supply the equity. Martin refuses to aknowledge there will be interest on these equity loans. Why would he, it is not coming from Nalcor, but from the tax payer. There is also a reference to the cash reserves which must be used to maintain the debt service ratio of 1.4. This is a further 200-300 million which will have to be borrowed by the government and retained in the project, to effectively float the 1.4 DSR. Martin also says at the end he must check where Premier Dunderdale got the 300 million figure for the delay of 1 year. Dunderdale must have got that number from Nalcor.... and it is real. There is no way that Martin, as CEO of Nalcor is not able to answer this question truthfully. It is why they had to spend 100 million before sanction, to protect a schedule, which they have now lost. This interview should be kept for posterity. This is Martin at his best in manipulating the media ... he truly is a world class expert in spin.