Actual Media

Return on Investment - Private equity funding for projects big and small

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Courtesy of Actual Media

It’s been said that Canada’s market lags behind other international jurisdictions like Europe and Australia in encouraging private equity investment. Strange, since Canada is certainly not lacking in civil infrastructure that needs repairing or replacing. Canada also houses experienced equity players who have the protocols to ensure that infrastructure projects get built efficiently and cost effectively. The interest in investing exists; the onus to create processes and procedures to welcome these players and their equity dollars to the table is increasingly on the various levels of government.

A quick review of the statistics confirms Canada’s infrastructure investment opportunities are only increasing. The Canadian Council for Public-Private Partnerships’ (CCPPP) website reports that 31 per cent of infrastructure in Canada is 40- to 80-years old, with 28 per cent of infrastructure over 80-years old.  According to the CCPPP, the current cost to rehabilitate Canada’s civil infrastructure system at the municipal level is estimated at $57 billion: $20.7 billion is required for transit system infrastructure for the period 2006-2010 and $30 billion to $40 billion of investment is required to improve just Ontario’s water and wastewater systems.

British Columbia’s market has been the most open to private equity investment. This encouragement has led to more activity in infrastructure funding than anywhere else in Canada. Projects like the Golden Ears Bridge and the Sea-to-Sky Highway (both made ReNew Canada’s top 10 in 2007) show the province is actively pursuing partnerships between the public and private sectors. The government of British Columbia has realized that it needs help to efficiently and cost-effectively develop its abundant natural resources to meet growing power requirements. BC Hydro has been increasingly effective at encouraging the development of independent power projects like hydro and wind developments.  The public company Plutonics Power Corporation and private companies Cloudworks and Sea Breeze as well as the income trust Innergex and the CFI Infrastructure Opportunities Fund have all invested in projects designed to augment the province’s supply of power.

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