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Infrastructure Bank to embark on $10B growth plan, get creative in attracting investors

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The Bank can accelerate the deployment of new wind energy, solar energy, energy storage and electricity infrastructure projects that will create jobs and investment

Canadian Renewable Energy Association

Private-sector firms have been wary of such investments, according to the bank, because of uncertainty about the savings they generate. Now, though, the bank is aiming to finance upfront capital costs in an effort to help prove the projects’ worth.

The lender is also creating “a mainstream, broadly marketed debt product to attract new market participants beyond the existing large equipment manufacturers and energy services companies present in the current limited market.”

Likewise, the bank said clean-power projects often run into delays or face financing obstacles, so it will offer cheap and long-term capital tied to revenue streams that are usually not enough to entice traditional investors.

Those investments, the bank said, will be structured “to increase the use of private-sector capital, reduce the weighted average cost of capital, provide certainty on long-term debt and equity returns, and transfer more construction and operations risk to the private sector.”

The supply of capital will be there

Michael Sabia, chairman, Canada Infrastructure Bank

Investors have become more climate-conscious and focused on environmental, social and corporate governance factors in recent years. The renewable energy industry is also convinced that the infrastructure bank’s commitments could drive some of those investors to Canada.

“Through the provision of low-cost and long-term capital, the Canada Infrastructure Bank can facilitate and accelerate the deployment of new wind energy, solar energy, energy storage and electricity infrastructure projects that will create jobs and investment in the short-term while reducing greenhouse gas emissions today and in the future,” the Canadian Renewable Energy Association said in a Thursday release.

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