Muskrat Falls project receives Triple A credit rating

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An aerial view of Muskrat Falls. — File photo by Ashley Fitzpatrick/The Telegram

Natural Resources Minister Tom Marshall says a Triple A rating has been assigned for the financing of the Muskrat Falls project by credit agency Moody’s Investors Services.

Marshall told the provincial legislature this high rating is based on the strength of the loan guarantee that the premier successfully negotiated with the Government of Canada.

"Mr. Speaker, the Triple A rating has important value for the people of the province when it comes to raising the debt financing as it will result in lower borrowing costs. By reducing the cost of financing for the project, the loan guarantee represents a projected one billion-dollar savings. These savings will be passed directly onto ratepayers in our province," Marshall said.

The minister said this rating "solely reflects the unconditional, irrevocable and absolute guarantee provided by the Government of Canada for debt that will be issued by Nalcor funding entities for the Muskrat Falls project."

Marshall said the provincial government did its "due diligence to ensure we attained a guarantee that provides maximum value for the project and for the ratepayers of Newfoundland and Labrador."

He also reiterated the province's stand that Muskrat Falls is the least-cost source of electricity to meet the growing energy needs of Newfoundland and Labrador’s families and businesses.

"From jobs and business contracts during both construction and operation, to stable electricity rates and additional provincial revenue, the benefits of the Muskrat Falls hydro project will be accrued to the people of the province today and for many generations to come," said Marshall.


Organizations: Investors Services

Geographic location: Canada, Newfoundland and Labrador

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Recent comments

  • Jeff
    April 25, 2013 - 08:26

    How do you start a "Bring Back Danny" campaign?? Kathy "The Brain" Dunderdale are her flunkies, along with this project is going to sink this province. If you read this, remember I said that.

    • Duh Do
      April 25, 2013 - 08:34

      er Jeff, do you need reminding that Muskrat Falls fiasco is King Danny's brainchild and legacy project???

    • Jeff
      April 25, 2013 - 18:20

      Yes i'm fully aware who's "brainchild" it was and do not need reminding, thanks... How it's managed between Nalcor and our current govt going forward is a different story from who was the creator of the "fiasco" as you put it. Danny is no longer our decision maker. Do you need reminding of that??? Just you watch.......

  • Wondering
    April 24, 2013 - 12:28

    John Smith cranks out his usual comments, and ignores that the demand forecast for energy here is failing, and oil use and costs for Holyrood dropping. And the PUB has now ordered a review and upgrade on our present poor conservation measures. That will drive Holyrood use lower still. Might the fed engineer be watching all this and deem the project not viable and pull their guarantee?

  • Jon Smith
    April 24, 2013 - 10:58

    The oil prices will stabilize quite nicely with the coming self sufficiency in oil and gas in the United States before 10 years out. The push by the federal government in Canada will see Western Canadian oil and gas reach eastwards to Nova Scotia will improve and stabilize Canadian petroleum prices. The quest to beat Quebec at the hydroelectric export game will present a difficult road ahead for Newfoundland. Subsidizing power sales to the mainland grids is not a sound business plan. We cannot turn back the clock but one wonders what we might have gained from a pro business prime minister like Harper if we had not been so aggressive in ABC ing him to our detriment. The future will have to look back and provide the 20/20 vision of that political initiative of the PC government.

  • Randy P
    April 24, 2013 - 05:36

    Since Danny Williams left this government have been crusified, remember this was his idea. I still think that this is on of the best moves this province has ever made. The critics are so short sighted and they must be living in a vaccum because you have absloutely no idea what is going on in the rest of the world. If you could go back in time 15 years and visit China and then come forward to present day you would know that China's development is off the scale and that as more people over there lay down their bicycles and buy cars they are going to need oil and lots of it. They are 1.6 billion strong not to mention India's 1 billion. Oil prices may be low right now but give it another 10 years and you will thank your lucky stars for Muskrat Falls. GET EDUCATED!!!

    • John Smith
      April 24, 2013 - 06:35

      You are absolutely correct. The thing is oil prices are not low...they are high. When Hibernia was costed oil was at $20.00 a it is over $100.00 a barrel. Oil will go higher, but that is not the only reason for this project. We will be in need of additional energy in as little as 5 years from now, and if we didn't go with muskrat we would have spent money on something not nearly as beneficial. Pouring more money into the sinkhole in Holyrood, or daming the last few small rivers here on the island would have been a complete waste of money. Now we will have all the power we will need for the next 100 years...a connection to the mainland grid, allowing us to persue alternatives, and sell some on the spot market, stableize our rates forever, stop polluting the atmosphere, develop a way around quebec...and on and on. We have had 4 polls in a row showing the majority support this project....those that post here are just white noise....

    • Little Man Dan
      April 24, 2013 - 10:50

      Here Johnny, Johnny, my lapdog lackie; keep plugging away at it and stroke my ego too. But, be wary about oil prices as global experts are projecting a significant drop in prices within the next 12-24 months; some say as low as $50. barrel. And they're real experts, not like Missed by Millions Minister Marshall's projections.

  • Joe
    April 24, 2013 - 04:14

    Tom Marshall I am ashamed that you are so stupid to think that the people of the province will fall for that statement. Moody's Triple A rating is based on the co-signer of the loan's ability to pay it back; in other words the Fed's have backed and endorsed it and the people of the province will forever have their electricty bills hiked to the max to pay for it. One more thing as all this comes to fruition, I will as long as I am alive mention this in any forum I can get a chance to express my opinion. Joey's Upper Churchill deal is a pittance compared to this Newfie joke you are about to embrace. Thanks Tom!! Just as we though we were getting our heads above water.

  • Maxwell
    April 23, 2013 - 20:01

    Well, I had triple A credit too until I over spent a bit. Not being smart with your money is not good. Triple A is great when you're getting the credit, not when you have to pay it back.

  • Brian
    April 23, 2013 - 15:42

    The federal loan guarantee is for $6.3 billion ( I think ). Is the AAA rating for the entire cost of the project or just for the guaranteed portion ? Where will we be as ratepayers when / if the cost of the project gets up to around $15 Billion? The project completion date is already extended until 2018.

  • Maggy Carter
    April 23, 2013 - 15:05

    Actually, Marshall was being honest when he stated that the rating is solely a reflection of the federal loan guarantee. Moody's didn't evaluate the project and could care less whether it bankrupts the province. It is enough for them to know that the feds are backstopping it and will pony up in the event it comes apart at the seams. But there might be another shoe yet to fall. There is a good possibility that the province's own credit rating may take a hit if oil prices continue to fall and Kennedy and company can't cut enough to keep the deficit under control.

  • Maurice E. Adams
    April 23, 2013 - 14:56

    Ditto David.

  • John Smith
    April 23, 2013 - 14:39

    LOL...once more we have been graced by the intelligensia...the illuminated minds that inhabit our fair province... but people are not buying your horse$hit anymore guys...but keep it up...I love a good laugh...

  • Thanks Harper
    April 23, 2013 - 14:32

    Thank you Prime Minister as ratepayers and taxpayers of NL we are going to need all the subsidies we can get to pay for this project.

  • Wondering
    April 23, 2013 - 14:23

    Guess Moodys not concerned that forecast power needs is not materializing. Lower oil cost and lower oil use at holyrood, and using less energy per house for electric heat..... so the rationale for the project is failing.

    • Robb
      April 23, 2013 - 21:35

      So Wondering, you think continuing to burn fossil fuels is the way to go, and you really think the oil on this planet will last forever.....this is where the level of intelligence of the liberals and ndp is totally lacking....renewable vs does not take a genius to figure this one out.....and let the naysayers and doomsday crackpots put whatever spin they can on this, but burning oil and polluting for electricity is just plain unacceptable. But I am sure we will hear all the crap from the liberals or ndp who just wish it was them doing the project........wonder why Dean McDonald would not stick his head into politics...??

  • Jon Smith
    April 23, 2013 - 14:20

    The guarantee was dictated by the federal government and has limits on amount and requires Nova Scotia to be in or no guarantee and the project must be completed regardless of cost. It is not the least cost for Muskrat because least cost for Muskrat would transmit power through Quebec and cost about one half of the go around Quebec cost. It is not the least cost for power because the isolated island would cost about one half. Statements that the project will provide additional provincial government revenue are scary because the challenge will be to protect low income families from the captive high rates which will be the highest (double at least present rates) and far exceed the average of electricity rates in Canada. The one billion savings is pie in the sky-they might as say two or three billion.

  • Tony Rockel
    April 23, 2013 - 14:18

    What a laugh (or it would be if this weren't a tragedy). This says nothing about the merits or otherwise of the project. It just tells us how confident Moody's is that we'll pay up for the next 50 years. Need I remind readers that Moody's was one of the agencies that gave all those sub prime mortgages a triple A rating just before the 2008 meltdown. Moody's was paid to say nice things about whatever happened to be the flavour of the month in investment circles.

  • Kevin
    April 23, 2013 - 14:16

    This TRIPLE A performance means nothing to the common citizen who will be paying throught the nose when that powers goes on line. All this is, is something to make the heads of those idiots in confederation building swell even more........................IF THEY COULD. We are a so called have province that is ran by a damn bunch of idiots...........TOP TO BOTTOM...and that includes MILLIONS MINISTER MARSHALL and moron premier BLUNDERDALE. I heard open line this afternoon where the host said that is wasnt fair for the public to saying what they have been about her. I think we have the right to say what it is that 99% of us feel..................she is an idiot beyond belief, that is running this province in the ground everyday we live. This crap deal of Muskrat Falls will be the final nail in the coffin of average households when it goes on line and people cant afford to live. Cause god knows that with the saleries and WAGE FREEZES that are occuring now, there will be alot more people of this province packing it up and leave for better income to help support the citizens of this province. Cause damn well sure it aint the idiot in confederation building that are going to help us.............AND THATS A FACT !!!!!!!!!!!

  • Is he still here?
    April 23, 2013 - 13:51

    Ah, nice to see that Missed by Millions Minister Marshall is still with us and babbling on. I thought you were leaving, Tom. When? And not a tentative date please; circle one on the calendar, and not the Mayan variety; we want something more accurate. You have zero credibility, sir.

  • saelcove
    April 23, 2013 - 13:51

    Well it should with a half million people to pay for it

  • Don II
    April 23, 2013 - 13:00

    Forget the Government of Newfoundland propaganda, you nailed it right on the head David.

  • david
    April 23, 2013 - 12:45

    What the credit rating explicitly says is that the Newfoundland taxpayer, rubes that we are, is deemed to be extremely dependable to repay the loans. As bagholders-of-last-resort, we're a very low risk to welch on the debt, and we'll reapy every last dime owing to the lenders, if turned to (ha ha ha ha ......if!). So, Mr. Tom Marshall...this is not an endorsement of the project, as you would have us idiots believe. It is an indictment of our collective financial naivete, backed by gobs of (quite disposable) oil money. Moody's loves our province for our "world class", permanent financial stupidity, backed by very temporary assets. Let's celebrate!