Canada Infrastructure Bank and ITC Investment Holdings, an affiliate of Fortis, have agreed to invest C$1.7 billion in the Lake Erie Connector project. The proposed project is a 117-kilometer underwater transmission line connecting Ontario with the PJM Interconnection, the largest electricity market in North America.
TORONTO, April 13, 2021 /CNW/ – The Canada Infrastructure Bank (CIB) and ITC Investment Holdings (ITC) have signed an agreement in principle to invest $1.7 billion in the Lake Erie Connector project.
Under the terms of the agreement, the CIB will invest up to $655 million or up to 40% 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 CIB and ITC Investment Holdings signed an agreement in principle to invest $1.7B in the Lake Erie Connector project.
The Lake Erie Connector is a proposed 117 kilometre underwater transmission line connecting Ontario with the PJM Interconnection, the largest electricity market in North America.
The 1,000 megawatt, high-voltage direct current connection will help lower electricity costs for customers in Ontario and improve the reliability and security of Ontario’s energy grid. The Lake Erie Connector will reduce greenhouse gas emissions and be a source of low-carbon electricity in the Ontario and U.S. electricity markets.
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.
The project will also help Ontario to optimize its current infrastructure, avoid costs associated with existing production curtailments or shutdowns. It can leverage existing generation capacity and transmission lines to support electricity demand.
ITC continues its discussions with First Nations communities and is working towards meaningful participation in the near term and as the project moves forward to financial close.
The CIB anticipates financial close late in 2021, pending final project transmission agreements, with construction commencing soon after. 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.
This is the CIB’s first investment commitment in a transmission project and another example of the CIB’s momentum to quickly implement its $10B Growth Plan.
The Lake Erie Connector is a 1,000 megawatt, 117 kilometre long underwater transmission line connecting Ontario and Pennsylvania.
The PJM Interconnection is a regional transmission organization coordinating the movement of wholesale electricity in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.
The project will help to reduce electricity system costs for customers in Ontario, while helping to support future capacity needs.
The CIB is mandated to invest CAD $35 billion and attract private sector investment into new revenue-generating infrastructure projects that are in the public interest and support Canadian economic growth.
The investment commitment is subject to final due diligence and approval by the CIB’s Board.