OTTAWA — The Canada Infrastructure Bank (CIB) and ITC Investment Holdings have announced they have signed an agreement in principle to invest $1.7 billion in the Lake Erie Connector project.
The project is a proposed 117-kilometre underwater transmission line connecting Ontario with the PJM Interconnection, the largest electricity market in North America, an April 13 release explained. Under the terms of the agreement, the CIB will invest up to $655 million or up to 40 per cent of the project cost. ITC, a subsidiary of Fortis Inc., and private sector lenders will invest up to $1.05 billion, the balance of the project’s capital cost.
The statement said the 1,000–megawatt, high-voltage direct current connection will be a source of low-carbon energy and will help lower electricity costs for customers in Ontario.
During construction, the Lake Erie Connector is expected to create 383 jobs per year and drive more than $300 million in economic activity. Over its life, the project will provide 845 permanent jobs and economic benefits by boosting Ontario’s GDP by $8.8 billion.
ITC will continue its discussions with First Nations communities on participation in the project.
The CIB anticipates financial close late in 2021, pending final project transmission agreements, with construction commencing soon after close. ITC will own the transmission line and be responsible for all aspects of design, engineering, construction, operations and maintenance.
ITC acquired the Lake Erie Connector project in August 2014 and it has received all necessary regulatory and permitting approvals, including a U.S. Presidential Permit and approval from the Canada Energy Regulator.
The venture is the CIB’s first investment commitment in a transmission project and represents a project supported from its $10B Growth Plan fund.
The PJM Interconnection is a regional transmission organization with participation from entities in Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.
“This project will allow Ontario to export its clean, non-emitting power to one of the largest power markets in the world and, as a result, benefit Canadians economically while also significantly contributing to greenhouse gas emissions reductions in the PJM market,” stated Ehren Cory, CEO of the CIB, in a statement. “The project allows Ontario to better manage peak capacity and meet future reliability needs in a more sustainable way.”