a partner to invest in canada’s new infrastructure · 2020-03-04 · canada infrastructure bank |...
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www.cib-bic.ca
March 2020
A Partner to Invest in Canada’s New Infrastructure
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada 2
Our ambitious goal
▪ The Canada Infrastructure Bank (CIB) is a Crown corporation dedicated to:
▪ Advancing new partnership models and transforming the way infrastructure is planned, financed
and delivered
▪ focus is on transformational projects in the public interest, linked to national economic
priorities and delivered in partnership with public sector sponsors and private and institutional
investors
▪ Quick facts:
▪ four priority sectors – green, transit, trade and transportation, broadband
▪ committed investments = approximately $3.6 billion
▪ 90 federal, provincial, territorial, municipal and Indigenous organizations engaged in nine months
▪ participating in nine projects
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada 3
Our three central responsibilities
Invest
$35B to attract additional private and institutional
capital into projects
Develop
knowledge, research, data and information
Advise
public sponsors on project
development and innovative investment
options
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada 4
Our main functions
Advising alllevels of
governments
Acting as a centre of expertise
Fosteringevidence-based
decisionmaking
Structuringproposals
andnegotiatingagreements
Investing ininfrastructure
projects
Receivingunsolicitedproposals
Collectingand
disseminatingdata
5
What We Do
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada 6
Investing $35B in four priority sectors
Green Infrastructure Trade and TransportPublic Transit Broadband
Examples include: water
services and wastewater
treatment, renewable
energy, electricity
transmission, interties
and district energy
Examples include: light
rail transit, subways, and
bus rapid transit
Examples include: ports,
freight and passenger
rail, highways, all-
season and resource
roads, bridges and
tunnels
Example includes:
broadband infrastructure
bringing 50/10 high-
speed connectivity to
unserved and
underserved communities
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada
▪ We play an active advisory role with public sector project sponsors
▪ Increase awareness regarding innovative investment and financing models
▪ Assess, at no cost to project sponsors, revenue-generating project proposals
▪ Build relationships with the market through tools such as market soundings to determine private
sector interest
▪ Evaluate the public interest and bankability of projects
▪ We offer specialized commercial and investment expertise
▪ Structuring debt, equity, hybrid investments
▪ Complex financial modeling
▪ Financial advisory
▪ Project structuring and procurement options
7
Leading advisory and investment expertise
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada
▪ Members of our team have worked for major
banks, advisory, infrastructure and investment
firms. They bring experience from large
transactions in Canada and around the world in
sectors such as:
▪ Power and renewables
▪ Public transit
▪ Roads and toll roads
▪ Rail and light rail transit
▪ Ports
▪ Water and wastewater
▪ Broadband
8
In-house professionals
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada 9
Sustainable transit and transportation
Green renewable energy
Clean, safe water and wastewater
Potential green benefits of projects
including greenhouse gas reductions
Participating in nine projects
Pirate Harbour
Wind FarmGO Expansion
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada
August 22, 2018
10
Announcements
May 30, 2019 June 25, 2019
July 15, 2019
Up to $2 billion
(GO Expansion)
Up to $55 million
(High Frequency Rail)
$1.283 billion
(Transit)
Up to $20 million
(Water and Wastewater)
Memorandum of Understanding
(District Energy)
August 1, 2019 August 28, 2019
Advisory Engagement
(Hydroelectricity Expansion)
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada 11
Announcements (cont’d)
December 4, 2019 December 17, 2019 February 5, 2020
Memorandum of Understanding
(Wind Farm)
Memorandum of Understanding
(Hydro-Fibre Link)
Up to $300 million
(Contrecoeur Port)
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada
Building a pan-Canadian portfolio of projects
REM
Project
transit
Sector
X
Urban Rural Northern Advisory MOU
X
Investment
GO Expansion transit X X
VIA Rail transport X X X
Mapleton green X X
Lulu Island green X X
Contrecœur trade X X
Taltson green X X
Pirate Harbour green X
Kivalliqgreen
broadbandX X
12
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada
▪ Expertise allows the CIB to play an active advisory role with public sector sponsors to assist them
in bringing forward project proposals for potential CIB investments
▪ Focus is on investing and being a catalyst for new transformational infrastructure
▪ Investment fills the gap in capital structures for new projects
▪ The CIB has flexibility to invest across the capital structure and brings a disciplined investment
approach to projects, including appropriate risk transfer
▪ Project investment decision-making and oversight by the CIB Board of Directors
▪ Complementary to, yet distinct from, existing government departmental programs that invest in
infrastructure through grants and contributions
13
Advantages of the CIB approach
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada
The Minister’s Statement of Priorities and Accountabilities provides direction on the CIB’s overall goals.
The CIB’s governance system for accountability and transparency includes:
▪ Board of Directors
▪ Corporate Plan, Annual Report and Quarterly Financial Reports
▪ Disclosure related to Privacy, Expenses, Access to Information
▪ Annual audit and other required reviews
▪ Appearances before Parliamentary Committees
14
Our commitment to accountability and transparency
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada 15
How We Partner
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada
▪ Partner with governments on their priority projects
▪ Invest to fill financing gap in projects
▪ Focus on new revenue generating projects in priority sectors
▪ Attract new private capital to infrastructure projects
▪ Transfer appropriate risk to the private sector
▪ Structure terms to drive private sector performance
▪ Align risk with reward
▪ No sales of existing assets
16
Working with our partners
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada
Influence on private investment and risk transfer
17
Design Bid Build
(DBB)
Design Build
(DB)
Design Build
Finance
(DBF)
Design Build
Finance Maintain
(DBFM)
Design Build
Finance Operate
& Maintain
(DBFOM)
DBFOM with
Revenue/Usage
Risk Transfer
Financing
Public
Private
CIB
Risk Allocation
Design
Build
Maintain
Operate
Revenue/usage
Public Public Public Public Public Public
Private
(short-term)
Private
(long-term)
Private
(long-term)
Private
(long-term)
CIB Financing CIB Financing CIB Financing
Public
Public
Public
Public
Public
Public
Public
Public
Public
Public
Public
Public
Public Public
Private
Private
Private
Private
Private
Private
Private
Private
Private
Private
Private
Private
Private
Private
Private
Private
Public-Private Partnership Models
Increased Private Sector Financing
Increased Risk Transfer to Private Sector
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada 18
Project process flowchart
Intake AppraisalFormal
Engagement
Investment
Structuring &
Commitment
Final
Negotiation &
Closing
Funding,
Monitoring &
Exit
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada 19
Appraisal of potential advisory/investment mandates
Public
sponsor?
Long-term
private
sector risk
transfer?
Estimated
capital cost?
Potential project for the
CIB advisory and/or
investment
commitmentLikely
outside of
the CIB’s
mandate
Yes
Small
and
one-off
Small -
potentially
replicable
Large
No Yes No
YesSector?
Transit
Trade and
Transport
Green
Infrastructure
Broadband
Other
Aligned with
government
policy
objectives?
No
No
Capable of
being financed
completely
commercially?
NoPotential to
generate
revenue?
Potential
to attract
private
capital?
Yes YesNew
and in
Canada?
Yes
No
Yes
No
Note: projects not satisfying all criteria may still be
considered in certain circumstances.
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada
▪ Does my project fall under one of the CIB’s priority sectors?
▪ Does a financing gap exist in my project without the CIB’s involvement?
▪ Is my project capable of generating revenue?
▪ Is there a reasonable probability to attract private capital to my project?
▪ Does my project transfer appropriate risk to the private sector throughout the project lifecycle?
▪ Is my project considered transformational?
▪ For smaller projects, does the project have the potential to be replicated in other jurisdictions?
20
Questions for project sponsors to consider
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada 21
How We Innovate
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada 22
Investment approach is flexible and customized
▪ No grants
▪ Investment: market pricing or
below
▪ Pricing below commercial
rates, customized to each
project
Structures
▪ Debt or equity investment
▪ Senior/preferred or
subordinated
▪ Long term or short term
Instruments
▪ Protect investment, allow
sponsor and proponent to
manage project effectively
▪ Allocation of risks and
alignment of interests between
all parties
Terms
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada 23
Green Infrastructure
Project Opportunities
▪ Renewable power, especially for
remote and Indigenous
communities
▪ Municipal and Indigenous water
and waste water
▪ Transmission projects including
interties
▪ District energy
Innovative models that help
transfer long-term risk
▪ Merchant power generation
▪ Merchant transmission
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada 24
Public Transit
Project Opportunities
▪ LRTs, subways
▪ Bus rapid transit
▪ Flexibility for extensions and
expansions
▪ Transit Oriented Development
Innovative models transfer long-
term risk
▪ Operations risk
▪ Integration risk
▪ Revenue risk, where possible:
▪ Partial availability payments
▪ Volume risk transfer
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada 25
Trade and Transport
Project Opportunities
▪ Ports
▪ Freight rail
▪ Passenger rail
▪ Highways
▪ All-season roads
▪ Resource roads
▪ Bridges and tunnels
Innovative models help transfer
long-term risk
▪ Long-term integrated concessions
transfer responsibility to build and
operate (BOTs) for ports and rail
▪ Toll roads and shadow toll roads
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada
Commitment to invest a minimum of $1 billion in broadband over the next 10 years.
– Budget 2019, Government of Canada
26
Broadband
▪ Increase Broadband infrastructure bringing 50/10 high-speed connectivity
to unserved and underserved communities
▪ Innovations that facilitate the transfer of long-term risk in the following
models:
▪ Traditional (grant programs)
▪ Public subsidy (competitive procurements based on lowest subsidy
requested)
▪ Public-Private Partnerships
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada 27
Connect in-person or online
Learn: www.cib-bic.ca
Follow: twitter.com/cib_en
linkedin.com/company/canada-infrastructure-bank
Inquire: investments@cib-bic.ca
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada 28
Appendix – projects in detail
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada 29
Timeline showing momentum
August 2018
▪ Réseau express
métropolitain
(REM):
$1.28 billion
investment in
Montreal transit
project
May 2019
▪ GO Expansion –
On Corridor: Up
to $2 billion
investment
commitment to
Metrolinx / IO
transit project
June 2019
▪ VIA Rail High
Frequency
Rail: $55 million
commitment for
planning and
pre-procurement
July 2019
▪ Mapleton Water
and Wastewater:
Up to $20 million
investment
commitment to
Township’s project
August 2019
▪ Lulu Island
District Energy:
Memorandum of
Understanding
with City of
Richmond
August 2019
▪ Contrecœur
Port Terminal:
Memorandum of
Understanding
with the Montreal
Port Authority
August 2019
▪ Taltson
Hydroelectricity
Expansion:
Advisory work with
the Government
of Northwest
Territories
December 2019
▪ Contrecœur
Port Terminal:
Up to $300 million
investment
commitment with
the Montreal Port
Authority
December 2019
▪ Pirate Harbour
Wind Farm:
Memorandum of
Understanding
February 2020
▪ Kivalliq Hydro-
Fibre Link:
Memorandum of
Understanding
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada
Project highlights
Réseau
express
métropolitain
Urban public
transit
Investment
Commitment
$1.28B
($6.3 billion total
project capital
cost)
Province of
Quebec
Job creation,
green house gas
reduction, lower
congestion
Yes – fare box Yes – CDPQ
investment
Yes
GO Rail
Expansion
Regional
transit
Investment
commitment
prior to RFP
Up to $2B
(estimated
$12 billion total
project capital
cost)
Province of
Ontario,
Metrolinx
Expanded access
to two-way all-day
regional transit for
200 million trips
per year
Yes – fare box Design-build-
finance-operate-
maintain model
selected by
Metrolinx
Yes
VIA Rail
High
Frequency
Rail
Planning and
pre-procurement
activities
$55 million Transport
Canada, VIA
Rail
Faster, expanded
and more
frequent service
to communities
on corridor
Yes – fare box To be confirmed
during planning
and pre-
procurement by
joint project office
To be confirmed
during planning and
pre-procurement by
joint project office
Township of
Mapleton
Rural
municipal
water and
wastewater
Investment
commitment
after RFQ and
pre-RFP
Up to
$20 million
(estimated
$30 million total
project capital
cost)
Township of
Mapleton
Expanded clean,
safe, affordable
public water
system
Yes – regulated
water rates set by
Township
Yes – consortium
equity investment
Yes – contract with
performance
requirements
30
Montreal
metropolitan
region
(QC)
Greater
Toronto
Hamilton
Area
(ON)
Quebec City
to Toronto
corridor
Mapleton
(ON)
Priority
Sector
CIB
Engagement
CIB
Commitment
Public
SponsorPolicy Goals
Revenue
Generating
Private
Investment Role
Risk Transfer to
Drive PerformanceLocation
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada
Project highlights (cont’d)
Lulu Island
Energy
District
energy
Priority
Sector
Memorandum of
Understanding
CIB
Engagement
Memorandum of
Understanding
CIB
Commitment
City of
Richmond
Public
Sponsor
Green, renewable
energy for
municipality
Policy Goals
Yes – district
energy users
Revenue
Generating
To be confirmed
through due
diligence
Private
Investment Role
To be confirmed
through due
diligence
Risk Transfer to
Drive Performance
Contrecoeur
Trade and
transportation
Investment
commitment
prior to RFP
Up to
$300 million
(estimated
between $750
and $950 million
total project
capital cost)
Port of
Montreal
Economic growth
through import
and export
Yes – port
operations
To be confirmed
through due
diligence
To be confirmed
through due
diligence
Taltson
Hydroelectricity
Green
Infrastructure
Advisory
Engagement
Advisory
Engagement
Gov’t of
Northwest
Territories
Clean, power via
hydroelectric
plant
Yes To be confirmed
through due
diligence
To be confirmed
through due
diligence
Pirate Harbour
Green
Infrastructure
Memorandum of
Understanding
Memorandum of
Understanding
Nova Scotia Green power Yes To be confirmed
through due
diligence
To be confirmed
through due
diligence
31
Richmond
(BC)
Location
Contrecoeur
(QC)
Northwest
Territories
Nova Scotia
Kivalliq
Green
Infrastructure
and
Broadband
Memorandum of
Understanding
Memorandum of
Understanding
Kivalliq Inuit
Association
Clean, power via
hydroelectric
plant and
broadband
Yes To be confirmed
through due
diligence
To be confirmed
through due
diligence
Nunavut
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada 32
Réseau express métropolitain (REM)
Benefits
of CIB
participation
Structuring
▪ CIB: $1.283 billion
▪ 15-year loan, 1-3% interest
▪ CDPQ: $2.961 billion
▪ preferred equity
▪ 8% preferred return
▪ Government of Quebec:
$1.283 billion
▪ non-voting subordinated equity
▪ Role improved risk transfer to the
institutional investor (CDPQ Infra)
▪ Concessional investment improved
project affordability
▪ Shift to innovative loan structure
rather than a grant
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada 33
GO Rail Expansion – On Corridor
▪ New, transformational project in the Greater
Toronto and Hamilton Area
▪ Low-interest financing to proponents balanced
with risk transfer to the private sector
▪ Funding commitment supports the CIB’s
mandate to invest in transportation
▪ Partnering with Metrolinx and Infrastructure
Ontario who are leading competitive procurement
process
▪ Optimizing risk transfer and crowding-in more
private capital than originally planned
Up to $2 billion
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada
▪ New, transformational project benefitting those
in the Quebec City to Toronto corridor
▪ Funding commitment supports the CIB’s
mandate to invest in public transit
▪ Partnering with VIA Rail and Transport Canada
on pre-procurement and de-risking activities
▪ Bringing expertise in infrastructure and financing
to support planning work during 2019-2021
34
VIA Rail Canada – High Frequency Rail
Up to $55 million
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada
▪ The CIB’s first investment in green
infrastructure
▪ The project will expand access to safe drinking
water and capacity for the treatment of
wastewater for up to 20 years
▪ Mapleton will continue to own all existing and
new infrastructure assets
▪ A pilot project to demonstrate new models for
structuring and financing smaller municipal water
and wastewater infrastructure projects
35
Township of Mapleton – Water and Wastewater
Up to $20 million
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada
▪ First opportunity in district energy
▪ City to expand its clean, renewable district
energy system from 3 million square feet to
50 million square feet
▪ City of Richmond will own all existing and new
infrastructure assets
▪ Consistent with the CIB’s mandate to advise on
and invest in green infrastructure projects
36
Lulu Island Energy Company – District Energy
Memorandum of Understanding
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada 37
Contrecœur Port Terminal
▪ First investment in trade-related project
▪ Montreal Port Authority’s new terminal will enable
importers and exporters to get products to
market quicker supporting Canada’s economic
growth and international trade
▪ $300 million investment commitment, following
the Memorandum of Understanding
Up to $300 million
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada
▪ Advisory engagement to develop project’s
business case
▪ First opportunity in hydroelectricity and in
Northwest Territories
▪ Proposed expansion of the existing Taltson
generating station by constructing a new
60 megawatt, clean energy hydroelectric
facility and 270 kilometres of transmission lines
▪ Consistent with the CIB’s mandate to advise on
and invest in green infrastructure projects
38
Taltson Hydroelectricity Expansion
Advisory engagement
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada 39
Pirate Harbour Wind Farm
Memorandum of Understanding
▪ First opportunity in Nova Scotia
▪ Potential development of a 112 megawatt wind
farm, with 28 four megawatt wind turbines,
15 kilometres of overland transmission lines and
two kilometres of subsea cables
▪ Project would add clean, renewable energy
generation and reduced greenhouse gas
emissions
▪ Consistent with the CIB’s mandate to advise on
and invest in green infrastructure projects
www.cib-bic.caCanada Infrastructure Bank | Banque de l’infrastructure du Canada 40
Kivalliq Hydro-Fibre Link
Memorandum of Understanding
▪ First opportunity in Nunavut
▪ Connecting two jurisdictions – Nunavut and
Manitoba – and two priority sectors – green
infrastructure and broadband
▪ Proposed construction of a new 1,200-kilometre,
150-megawatt clean energy hydroelectric line
between Nunavut and Manitoba
▪ Consistent with the CIB’s mandate to advise on
and invest in green infrastructure and
broadband projects
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