Nova Scotia Premier Darrell Dexter says he hopes to hear within a week whether the federal government will provide a loan guarantee for the proposed Muskrat Falls hydroelectric development.

"We're hopeful we are going to hear from them before budget day. Things like the loan guarantee effectively go into a stall during an election campaign," Dexter said Wednesday.

The latest federal budget will be unveiled March 22. If the budget is defeated, the country will be plunged into a general election campaign.

Dexter said federal regulations prevent the governing party from making announcements on behalf of the federal government during an election.

Newfoundland and Labrador and Nova Scotia have asked Ottawa for a loan guarantee for the project that would see power generated in Labrador and routed through underwater cables to the Island of Newfoundland and Nova Scotia.

The Muskrat Falls project is part of a larger plan to eventually dam two areas of the lower area Churchill River in Labrador to produce hydroelectric power.