The aid is well received for the territorial government which will have to find more than $ 1 billion to finance the project in the coming years.
The federal agency will offer its services to carry out the profitability analysis of the project and develop a financial structure. This aid could also lead to an investment, according to the Bank.
The Taltson project is one of the priorities of the Government of the Northwest Territories. It is even the cornerstone of its energy strategy to reduce its greenhouse gas emissions.
The project plans to expand the Taltson River Generating Station, connect the South Slave to the North Slave hydroelectric network, and supply the Slave Geological Province with power.
The government hopes to eliminate 240,000 tonnes of carbon emissions per year, and to attract investment from the mining sector to the territory with the supply of clean, less expensive energy.
For now, the NWT has secured $ 2 million from Ottawa, which has also pledged an additional $ 18 million over three years for the project in its 2019 budget.
The money will be used to plan a complex project, says Deputy Minister of Infrastructure Sandy Kalgutkar: "Working with the Infrastructure Bank will help a lot, because it's clearly a complicated project for any government, and especially one for a small government like ours. Using the expertise of the Infrastructure Bank will help a lot. "
For Pierre Lavallée, President and Chief Executive Officer of the Bank, this first hydropower production and transmission project of his organization fits well with the company's mandate.
"Part of our mandate is to invest in priority projects for the federal, provincial, territorial, municipal and aboriginal governments," explains Pierre Lavallée.
New investment formula
"What we are trying to do is to establish a project in which private and institutional investors will want to invest," he says. The capital will then be structured so that revenues, less transaction costs, will yield sufficient returns for a reasonable return for private investors. "
The Bank could then come to fill the "gap in the financial structure" by offering the remaining capital needed for the project, says its president and CEO.
The Taltson River Expansion Project is nothing new for the territorial government. A different form of the project had been presented a few years ago, but considered unsustainable.
"The last time the project focused on diamond mining revenues to be reliable and we just did not have the fiscal capacity to do it," says Kalgutkar.
However, the territorial government believes that this time is the right one because it is now a question of countering climate change and attracting investment in the territory.
A message that federal Minister Dominic LeBlanc shared during his recent visit to Yellowknife, emphasizing his government's new funding tools, such as the Canada Infrastructure Bank.
I think the impact that the project might have is why it's a project of interest.
The infrastructure bank and its way of working are not universally accepted in Ottawa, and opposition parties have often criticized it since its creation.
Sandy Kagutkar is not worried by these criticisms or by the changes that may be caused by this fall's territorial and federal elections.
He believes that the ultimate goal of the project to counter carbon emissions will remain a priority for future governments.