The Governments of Canada and Nova Scotia, alongside NSP Maritime Link Inc. (NSPML) and Nova Scotia Power Inc. (NSPI)—both subsidiaries of Emera Inc.—have finalized a $500 million federal loan guarantee aimed at reducing electricity costs for Nova Scotia customers.
This loan guarantee, provided by Natural Resources Canada, supports new debt issued by the Maritime Link Financing Trust (MLFT). The funds will be allocated to NSPI to offset its current unrecovered fuel and purchased power balance (FAM balance). This assistance is crucial for Nova Scotia customers, facilitating cost-effective, long-term financing for the replacement energy needed due to delays in the Muskrat Falls hydroelectric project in Newfoundland and Labrador. Any additional funds raised beyond the current NSPI balance will go toward future fuel and power costs.
The loan’s term and repayment structure will likely align with the existing Maritime Link bond program over 28 years. This initiative aims to mitigate rate increases for Nova Scotia customers while improving NSPI’s credit metrics by approximately 80 basis points, ultimately stabilizing its credit rating and benefiting customers directly.
However, these transactions are contingent on certain conditions, including regulatory approval from the Nova Scotia Utility and Review Board. Both NSPI and NSPML will submit applications related to the loan guarantee on September 25, 2024.
