Premier Kathy Dunderdale said there are no grounds to criticize last Friday’s announcement of a memorandum of agreement signed between Newfoundland and Labrador, Nova Scotia and the federal government on a loan guarantee for the $6.2-billion Lower Churchill hydroelectric development.
“There were three criteria the prime minister laid down for giving a loan guarantee,” said the premier, speaking with reporters Monday outside the House of Assembly.
“It was that it had to have national and regional significance, that it had to have financial and economic merit, and that it had to significantly reduce greenhouse gases. The federal government has acknowledged in this MoA that we have met all three conditions.”
Both provincial opposition leaders questioned whether the announcement may have jumped the gun given the federal government will only now obtain the services of financial advisers to handle due diligence. Liberal Leader Kevin Aylward said there remains an avenue for the federal government to back away from the loan guarantee commitment.
The premier does not believe the work of financial advisers will jeopardize the project at Muskrat Falls in Labrador.
“The financial diligence that is required is to see how the loan guarantee will be structured. Now when we have had major agreements in this province — with Hebron, with Terra Nova, with White Rose, and with Hibernia South extension — this is the way we do it. I’m at a loss to understand the criticism or opinion that this isn’t significant or doesn’t mean anything.”
She said an agreement in principle has always represented an important step in all of Newfoundland and Labrador’s major developments of the past.
Since Friday’s announcement, Dunderdale said she has received calls from across the country asking how the government and Nalcor Energy were able to obtain the memorandum of agreement from the federal government.
The statements of federal Minister of Natural Resources Joe Oliver on Friday were clear in verifying his commitment to the project, said the premier.
“I think Minister Oliver in his remarks was quite clear. This is not a question of whether there’s going to be a loan guarantee. There is a loan guarantee.”
An agreement on the particulars of the loan guarantee or equivalent financing is due by Nov. 30, or eight weeks after the federal government obtains relevant financial data, according to the memorandum document.