Signed, sealed and delivered

James McLeod
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Muskrat Falls loan guarantee sewn up

The only thing left now is to actually build the dam.

Premier Kathy Dunderdale, accompanied by Natural Resources Minister Derrick Dalley (centre) and president and CEO of Nalcor Energy, Ed Martin, announced  at Confederation Building Tuesday the agreements have been signed by the federal government and the Government of Newfoundland and Labrador to provide the federal loan guarantee for the Muskrat Falls project. — Photo by Rhonda Hayward/The Telegram

On Tuesday night, scheduled to coincide with the closing of the House of Assembly and the live supper-hour news broadcasts, Premier Kathy Dunderdale announced that the federal loan guarantee is finalized, and the money has been borrowed for Muskrat Falls.

“As far as Newfoundland and Labrador is concerned, all the t’s are crossed, the i’s are dotted, the loan guarantee is in place and secure, the financing is in place and secure, the interest rate is secure and now we just get on with the project,” Dunderdale said.

The announcement was held in the lobby of Confederation Building with more than 100 civil servants, cabinet ministers, members of the media and other dignitaries in attendance.


Financing announced

Support from Nova Scotia

On Lower Churchill financing

In her speech Dunderdale called the Muskrat Falls hydroelectric project one of the most significant developments in Canadian history, on par with completing the national railway.

“This is a project with tremendous vision. Our province will be practically 100 per cent renewable, powered by clean, emissions free energy, and our electricity customers can bank on stable electricity rates,” she said.

“We are shouldering our unshrinkable responsibility to leave no stone unturned, no resource untapped and to ground Newfoundland and Labrador’s future firmly and securely in the solid bedrock of sustainable and renewable prosperity.”

But stripping away all the rhetoric, the hoopla and the choir on hand to sing Christmas carols and patriotic anthems, Tuesday’s announcement was really all about the numbers.

The government has secured $5 billion in financing for the project for 40 years at a blended interest rate of 3.8 per cent.

“It’s much lower than we thought it would be,” Nalcor CEO Ed Martin told reporters after the announcement. “The actual financing of this project came in significantly less costly than we expected at (Decision Gate) 3.”

The $5 billion is just for the Newfoundland and Labrador portion of the project. Nova Scotia utility Emera will separately be going to the markets for financing on the maritime link.

Sitting beside Dunderdale at the announcement were ministers from Nova Scotia and from Ottawa.

Liberal Nova Scotia Energy Minister Andrew Younger has been deeply critical of the project, but on Tuesday he said he’s convinced it’s a great deal for everyone involved.

As recently as last month, Younger was speaking at hearings of the Nova Scotia energy regulator to lay out a laundry list of conditions to protect the ratepayers. On Tuesday, he was striking a different tone.

“Neither I nor the premier have ever spoken against the project,” Younger said. “We had concerns with some of the structure on the Nova Scotia end of it. In the past eight weeks we’ve been able to address our concerns on the structure that we had with Emera and so forth, and now we’re satisfied.”

Rob Moore, the federal minister responsible for Newfoundland and Labrador, was also on hand Tuesday, saying that the project is financially sound, and will create jobs both in Newfoundland and Labrador and Nova Scotia.

In her speech, Dunderdale made a special point of thanking Moore’s boss for his role in the project.

“When the greatest moments of our history are recollected long generations from now, Newfoundlanders and Labradorians will remember the choice that Prime Minister Harper made  — the choice to stand beside our people in advancing Muskrat Falls.”

Both Liberal Leader Dwight Ball and New Democrat Leader Lorraine Michael greeted the news with a shrug.

Both politicians said that they’re still worried about the final cost to ratepayers, and whether there will be cost overruns during construction.



Geographic location: Newfoundland and Labrador, Nova Scotia, Ottawa

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Recent comments

  • doug
    December 11, 2013 - 12:39

    my concern is if they had planned on getting a loan for this project and have spent nearly a billion dollars of taxpayers money before the loan is in place will the taxpayers money be returned to provincial coffers from this loan to compensate all the cuts to services which we have had to endure

  • Mr. Squeaker
    December 11, 2013 - 09:14

    The pollution won't be too bad. A few jobs. All you Newfies will only spend your mad money on booze smokes and tickets anyway. Poor people are poor regardless. Suffer or laugh it off, it is what it is. Tis a lovely project to help give the poor self esteem and feel like they can help, and not be such a burden on us. Everyone wants to be Indian all of a sudden. All the Thulians want is money in exchange for pollution to buy helicopters with. No better than they were 500 years ago trading for junk. Hahaha I like Paul Martins style, Dunderdale is my role model. Danny is a living GOD.

  • Ambrose
    December 11, 2013 - 09:06

    @ Kevin, Please tell me what have the people got to lose? if some one did a interview with Mr Murphy.

  • Richard
    December 11, 2013 - 08:48

    The only thing left to do is build the dam? No, there remains quite a lot left to do. Finding a customer willing to buy any of this electricity at a rate anywhere near the cost of production, for example. In the meantime, one sure thing left to do for the rest of us and our grandkids is to start paying for it.

  • Corporate Psycho
    December 11, 2013 - 08:40

    Signed, sealed, and screwed.

  • W. Bagg
    December 11, 2013 - 08:26

    The economics of electricity sales have changed since this project was conceived and studied or planned. Oil has dropped from 150 bbl to 100 bbl, shale gas has provided cheap power however we are stuck in 2007. It is like going out an building a fish plant to process cod fish in 1991 except multiply it by ALOT. We are planning on making the power at MF for about 15-20 KWH if I remember properly. Los Angeles sells power for about .15 KWH, Ontario 12.9 cents KWh at peak, BC at around 10 cents KWh and in New York it goes for about .18 KWh.

    • Brett
      December 11, 2013 - 10:38

      Those rates are subsidized by either the province or the state. The real cost of electricity generation is much higher. The true cost of generating a KWH of electricity is estimated at around 25-30cents. Or at least that what I've been told by the utility I do contract work with in Ontario.

    • W. Bagg
      December 11, 2013 - 12:00

      @ Brett, I haven't hear or found any evidence to confirm when you say 25-30 cents to generate electricity in Ontario, except Nalcor's estimate here. There are several sources of power (wind, coal, solar etc) and all have very different costs. I think your 25-30 cents information is incorrect. If you find any proof, please post as a reference. I would like to confirm.

    • Robb
      December 11, 2013 - 12:16

      Thanks Brett, and this comment by W. Bagg is just another example of how the opposition likes to fear-monger. And then they complain about bill 29, sure you can't get a shred of truth from the opposition. What hypocrites.

  • Kevin
    December 11, 2013 - 08:04

    Ambrose, get out of the closet man so your NOT IN THE DARK. This whole project has disaster marked all over it. We, the taxpayers, will be paying through the nose for this for years to come Who cares who launched the deal, the public are the ones that will suffer with paying for this whole project. THUNDERDALE is nothing short of an embarassment to this province. Standing at the mic taking all the credit for something that Danny started before he left. She lost two highly respected MHA's when Osbourne crossed the house and Kennedy quit because of the way she governed things - SHE SUCKS. And we are going to pay for all the mistakes she has made !!!!!! And god knows there are lots of them !!

    • Robb
      December 11, 2013 - 08:38

      So Kevin, it's amazing how you liberals have the all-telling crystal ball. Just how do you know this project has disaster marked all over it? I mean really, how would you know? Fact is, you don't...your guessing, and trying to spread the liberal fear mongering and naysaying innuendo. Nice try, but I will stick with the experts on this.

  • Joe
    December 11, 2013 - 07:59

    If I can get a mortgage for less than 5% and The City of St. John's(in 2011) got a loan for 4.6%(Danny Boy hasn't released 2012F/S), do Canada and Newfoundland and Labrador have too much debt if the best they can do is 3.6%? Just something inquiring reporters might like to know.

    • W. Bagg
      December 11, 2013 - 08:42

      In the defence of financing, the term is 40 yrs your bank will give you a variable for up to 5 at the rates you suggested, but not longer. The good thing is Detroit proved it is possible for a jurisdiction to go bankrupt, perhaps we will either that or wages will have to skyrocket here for workers to be able to survive and since wages increase business dries up, except for oil

    • Jay
      December 11, 2013 - 08:58

      Joe, There are many questions to be asked about Muskrat Falls. The interest rate is not one of them. If you think that financing of 3.6% amortized over 40 years is not an excellent rate, you must be living in a different economy than the rest of us. Maybe "inquiring reporters" are not asking about this because it's so obvious.

  • Randy
    December 11, 2013 - 06:40

    Can you imagine Lorraine Michaels managing Muskrat Falls? God save us

  • Ambrose
    December 11, 2013 - 05:34

    First of all, nor Dwight Ball or Lorraine Michael understand the project, They are just hoping for failed on the PCS side, Just so they can say, we told you so. I just wish some one was smart enough to do a interview with Mr Charles Murphy of corner brook concerning this project, then maybe, all isn't dark.