Former minister Jim Prentice says Lower Churchill financed at excellent rates
Reflecting on the last year, former federal cabinet minister Jim Prentice — now senior executive vice-president and vice-chairman at CIBC — says Newfoundland and Labrador should be pleased.
The province has sustained strong economic conditions, he said in an interview Thursday, in part crediting capital investment in mining projects by companies such as Vale.
He added credit to the province’s offshore oil and gas industry, collectively highlighting a trio of oil finds by Statoil and its partner Husky Energy in the Flemish Pass.
“This is a very significant oil discovery,” he said of the finds, located about 500 kilometres northeast of St. John’s.
“I know the companies are excited about it— you know it spells for a bright future in terms of the offshore industry.”
He also made note of the Comprehensive Economic and Trade Agreement (CETA), Canada’s new free trade deal with the European Union. When it comes to looking at benefits from the deal, he said Newfoundland and Labrador’s geographic position gives it a competitive advantage within Canada for capitalizing on CETA.
And then there is the $7.7-billion Lower Churchill power project.
Prentice has issued public support of the Nalcor Energy-led project for years now, including earlier this year at the Noia oil and gas conference in St. John’s.
On Tuesday, it was revealed the megaproject — with a hydroelectric plant at Muskrat Falls in Labrador, plus transmission to Newfoundland, throughout the island and then on to Nova Scotia — had secured both federal support and
$5 billion in financing, on a 40-year term at 3.8 per cent interest.
The financing arrangement was the final hurdle before diving deep into construction, according to Premier Kathy Dunderdale.
“I was certainly optimistic about the capacity to finance the project. I think that optimism has been borne out,” Prentice said, when asked if the announcement was as he had expected.
“The project will be financed in the market at really excellent rates and it’s a fine investment for the people of Newfoundland and Labrador,” he said.
When last in St. John’s, he advocated for regional co-operation and full development of the energy potential on the lower Churchill River. That would include development of another hydro power plant at Gull Island — between the existing Churchill Falls power station and the Muskrat Falls plant currently under construction.
Prentice still suggested Gull Island be kept on the table as a project for the province, dismissing those who say there would be trouble in finding a home for the hydropower it produces.
“I think there’s a lot of potential for Canada and the U.S. continuing to work together on the importance of bringing Canadian hydroelectricity into the U.S. market,” he said.
Establishing a market is one thing. There will also be the challenge of getting the power to market, given it will take investment in new transmission infrastructure, in addition to the dam — plus the political wrangling that comes along with it.
“But again, I’m quite hopeful. I think we’ve seen a really groundbreaking degree of co-operation amongst the Atlantic premiers,” he said.