Canada Infrastructure Bank selects Montréal REM project for first investment

Canada Infrastructure Bank

The Canada Infrastructure Bank has agreed to invest in the Réseau express métropolitain light-rail project (REM) via a CA$1.28-billion (US$980-million) loan. This is the inaugural investment of the Canada Infrastructure Bank since its launch in 2017.

The REM light-rail project is being developed by CDPQ Infra, a wholly owned subsidiary of Caisse de dépôt et placement du Québec, and consists of a 67-kilometer (41.63-mile) high-frequency network with 26 stations.

The project is expected to cost approximately CA$6.3-billion (US$4.84-billion). With the agreement in place with the Canada Infrastructure Bank, the project’s financing has been finalized. In addition to the loan, CDPQ Infra will be responsible for CA$2.95 billion (US$2.27 billion), provincial government of Québec will invest CA$1.28 billion (US$980 million), Hydro-Québec will invest CA$295 million (US$227 million) and CA$512 million (US$393.34 million) from ARTM as compensation for land value capture.

There was a possibility that the equity stakes could be reduced with an agreement from the Canada Infrastructure Bank. However, as officials explained, because the investment will takes the form of a 15-year loan, CDPQ Infra’s equity stake in the project remains at approximately 70 percent and the province’s will be approximately 30 percent.

“We are pleased to participate in the funding of this important public infrastructure project,” said Pierre Lavallée, president and CEO of Canada Infrastructure Bank. “Public transit is one of our priority areas. Our role is to invest alongside private sector and institutional investors, and other public-sector partners to facilitate the development of strategic projects like the REM.”

Construction of the REM began in April 2018. The first trains are scheduled to run in the summer of 2021.

“This project will connect the Montréal region in a way we have never seen before, allowing residents to get to work faster and spend more time with friends and family‎. It is a prime example of the type of modern, resilient, and green infrastructure that Canadians across our country are looking for,” said Minister of Infrastructure and Communities François-Philippe Champagne. “The Canada Infrastructure Bank was created as an additional tool to help public dollars go further by attracting private sector investment and I am pleased to see that this innovative model has succeeded in bringing together private and public sector partners to realize this important project.”

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