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CIB finally slated to deliver billions in projects

Don Wall
CIB finally slated to deliver billions in projects
FILE PHOTO — Canada Infrastructure Bank CEO Ehren Cory.

The five-year-old Canada Infrastructure Bank (CIB) has finally hit its stride, CEO Ehren Cory told an online audience recently, with a projected pipeline of investments expected to deliver up to $20 billion in new infrastructure projects each year.

Cory delivered the CIB’s Spring Market Update April 27 in a presentation hosted by Canadian Council for Public-Private Partnerships CEO Lisa Mitchell.

The CIB added 20 new projects in fiscal year 2020-21, topping up its portfolio to 28 projects since its inception.

It’s proof of new momentum and finally establishing a foothold in such key sectors as Indigenous infrastructure and deep retrofit project bundling, Cory said.

“We should be getting between $10- and $20 billion of infrastructure built every year,” said Cory. “That’s kind of steady state for us. That’s the trajectory we’re now on and we expect to continue.”

The total capital value of the CIB’s project partnerships is now $20.9 billion, comprising $7.2 billion in CIB spending, $7.6 billion from private and institutional investors and $6.1 billion from other public partners.

The CIB has been given a funding envelope of $35 billion. Whereas just two years ago CIB leadership could only point to a handful of investments, such as Montreal’s $6.9-billion REM light rail project, a CDPQ Infra build to which the CIB has allocated $1.18 billion, the federal Crown corporation now has new deals with such diverse private and institutional partners as Enwave, the Ontario Teachers’ Pension Plan, IFM Investors, Algoma Steel, DIF Capital Partners, Fiera, Noventa, Johnson Controls, the Six Nations of the Grand River and Quebec’s Autobus Seguin.

The CIB has spread out investments in its five priority sectors, as mandated by the federal government – $2.9 billion in transit, $1.5 billion in clean power, $600 million in green infrastructure, $1.6 billion in broadband and $500 million in trade and transportation.

Cory said the CIB is well placed to handle a new set of responsibilities assigned in the recent federal budget.

The new mandates include decarbonization projects such as carbon capture, utilization and storage and hydrogen production; Small Modular Reactor deployment; and EV charging infrastructure.

“We’re already having great conversations with the market on those things,” said Cory. “We think they’re all perfect examples of where the CIB’s approach, partnering with the private sector, sharing commercial risks to get projects over the line and get projects that otherwise might, due to financial, commercial or technical risks, be stuck, and get them unstuck and over the line.”

Cory, formerly the CEO of Infrastructure Ontario (IO), who joined the CIB 18 months ago, said his present employer’s approach to risk allocation is the opposite of IO.

The CIB looks to de-risk projects by taking on risk to attract partners.

The CIB has now hired a roster of almost 100 investment specialists to develop packages in their areas of specialization, 80 per cent from the private sector, Cory said.

Evidence of the new sophistication is its Public Building Retrofit Initiative, a standardized investment approach that has attracted the city governments of Edmonton and Calgary and private sector partners in Quebec including SOFIAC, Fondaction, Econoler and Fiera Private Debt.

Dream Retrofits has also been allocated $136.6 million for work in Ontario and Saskatchewan.

“We’ve actually designed an approach where what we’re helping to do is for both building owners or aggregators, who can service a bunch of buildings where we can provide a low-cost, risk-sharing loan to do deep building retrofits to really put buildings on the path to net-zero,” Cory said.

The CIB has also refined its approach to supporting Indigenous infrastructure projects, Cory explained.
Previously, the CIB had a lower limit of $100 million for its investments.

“That’s just not going to work for in-community infrastructure,” said Cory of Indigenous projects. “So we’ve had to design simpler tools, easier legal agreements, easier due-diligence processes – you can’t put the same burden on a $15-million investment that you would on a $500-million investment.”

The second part of the Indigenous partnership supports broader economic development projects that have Indigenous participants.

Projects funded include the Oneida Energy Storage build, the Tshiuetin Railway and Kahkewistahaw Landing Infrastructure. Tshiuetin Rail will be the first Indigenous-owned railway in Canada, serving communities along the northeastern Quebec and western Labrador railway corridor.

 

Follow the author on Twitter @DonWall_DCN.

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