Ottawa endorses giant hydro loan
HAPPY VALLEY-GOOSE BAY, N.L.— Prime Minister Stephen Harper has signed off on a long-awaited federal loan guarantee for the $7.4-billion Muskrat Falls hydroelectric project in Labrador. The federal backing, which Harper promised during last year’s election campaign, is expected to save the governments of Newfoundland and Labrador and Nova Scotia more than $1 billion in borrowing costs. The agreement signed Friday guarantees up to $6.3 billion in debt for the financing of the project for a period of 35 to 40 years. Newfoundland Premier Kathy Dunderdale’s government has waited for the federal support before sanctioning Muskrat Falls. If it goes ahead, Muskrat Falls would be the largest public expenditure in Newfoundland’s history. It is expected to begin generating power in 2017, and some of that electricity would flow to Nova Scotia through subsea cables. Opponents have said Dunderdale has not proven the case for Muskrat Falls, accusing her of expediting a project that could burden future generations with a heavy debt.
If it proceeds, Muskrat Falls would be capable of generating up to 824 megawatts of electricity, 170 megawatts of which would go to Nova Scotia annually for 35 years. That would serve about 10 per cent of that province’s power needs.
The development is a joint venture between Nalcor Energy, Newfoundland and Labrador’s Crown utility company, and Nova Scotiabased private utility Emera.