The Canada Infrastructure Bank (CIB) and ITC Investment Holdings announced this Tuesday the signing of an agreement to invest $1,7 billion in the Lake Erie Connector Project; which will connect Ontario, Canada, with the PJM Interconnection in the U.S.
Firstly, under the terms of the agreement, CIB will invest $650 million, while ITC, subsidiary of Fortis Inc., along with private sector lenders will complete the figure with the remaining $1,05 billion, for the balance of the project’s capital cost.
Secondly, the Lake Erie Connector project is a proposed 117 kilometers transmission line that would run underwater; and would connect Ontario with the PKM Interconnection, as said, above. It will be a 1000 megawatt, high-voltage, direct current connection, that will help customers in Ontario lower their electricity costs.
Thirdly, the project would also improve the reliability and security of Ontario’s energy grid. Moreover, it will reduce greenhouse gas emissions and be a source of low-carbon electricity in the Ontario and U.S. electricity markets.
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ITC Holdings to own, operate and mantain the project
Moreover, during its construction phase, the project will generate around 383 jobs per year; it will also drive more than $300 million in economic activity. Indeed, over its life, the project will provide 845 permanent jobs and economic benefits by boosting Ontario’s GDP by $8.8 billion.
In addition, the project will also help Ontario to optimize its current infrastructure; avoid costs associated with existing production curtailments or shutdowns. On the other hand, as the project moves towards financial closing, ITC continues its discussions with First Nations communities.
Furthermore, the companies expect to have financial closing of the connection project by the end of 2021; as final project agreements are still pending. Construction phase will begin soon after. According to the statement, ITC will own the transmission line; and will also be responsible for all aspects of design, engineering, construction, operations and maintenance.
Finally, 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.