Nunavik hydro project secures $92-million loan
“It pretty much guarantees that we can cover the construction costs of this project”
The organizations behind a hydroelectric facility in Nunavik have secured a major loan that will finance the bulk of the project.
The Innavik project is a 7.5-megawatt run-of-river hydro dam on the Inukjuak River near Inukjuak, which is jointly run by the local Pituvik Landholding Corp. and Innergex Renewable Energy Inc. Innavik is expected to supply almost all the energy needed to power the community of 1,800, which currently relies on diesel.
Those involved in the project announced the closing of a $92.8-million loan through the Manufacturers Life Insurance Company last week for the construction and term financing of the facility. The total project cost is estimated to be about $128 million.
“It’s a mix of many feelings; the strongest feeling is relief—it pretty much guarantees that we can cover the construction costs of this project,” said Eric Atagotaaluk, director of Pituvik Sarvaq Power Corp., the entity overseeing the project.
“At least 80 per cent of this is secured.”
The construction loan will be converted into a 40-year term loan, carrying a fixed interest rate of 3.95 per cent once the facility reaches commercial operation, which is scheduled to happen by the end of 2022.
The 40-year term loan is set to align with the duration of the 40-year power purchase agreement signed with Hydro-Québec, which will purchase all the power Innavik produces.
The remaining $35 million, or roughly 20 per cent of the project cost, will be jointly financed by Innergex and Pituvik.
“Pituvik is still lobbying with the federal government to cover our 10 per cent,” Atagotaaluk said, adding that the corporation has applied for and awaits news on a few different federal subsidies.
In the meantime, construction on the project is well underway and expected to continue until mid-December, weather permitting, he said.
Although construction was delayed this season due to COVID-19 restrictions in Nunavik, crews have built the base of the hydro dam’s power station and the canal that will flow from the station.
Construction has also begun on a one-lane bridge over the Inukjuak River that will be used to transport building equipment to the site next summer. The community has opted to keep the bridge as permanent infrastructure to use in the future.
While southern-based CRT Construction has led the work so far, the company got approval from the Northern Village of Inukjuak to hire local workers, Atagotaaluk said. Like southern workers, the local employees are required to isolate themselves at the work site and not interact with other community members while they are on rotation.
In 2021, crews are expected to build a diversion canal, which will re-route the river’s flow so the dam infrastructure can be installed.
While conventional hydro dams use reservoirs to control water flow, Innavik is a run-of-river project, in which water is diverted from the river, run downhill through a pipe to a generating station, and then returned to the river downstream.
The site will consist of a series of four natural vertical drops over a 2.7-kilometre stretch. Its generating station will be located about 10 kilometres from the mouth of the Inukjuak River.
The project will also include a rockfill dam and spillway, as well as a 25-kilovolt transmission line installed on wooden poles connecting to Hydro-Québec’s existing plant north of the village.