Nfld. & Labrador

Market turmoil could delay Lower Churchill: N.L. Hydro chief

The crisis in the United States economy could lead to a small delay for the Lower Churchill hydroelectric megaproject, according to the head of Newfoundland and Labrador's energy corporation.

The U.S. economic crisis could lead to a six-month delay for the $9-billion Lower Churchill hydroelectric project, the head of Newfoundland and Labrador's energy corporation says.

The province will need to borrow billions of dollars to finance the project, and Ed Martin, CEO of Newfoundland and Labrador Hydro, said Wednesday the project could be set back by a few months as he waits for the financial market to sort itself out.

It was hoped the megaproject could get the green light as early as 2009, but with the U.S. economy in turmoil Martin said raising the cash on the open market won't be easy.

"Well, we can be flexible and we will be. We are going to be very strategic in terms of when we go in. If that means that we're going to delay going in for six months, we will," he said.

The project cleared a major hurdle last week when the provincial government reached a benefits agreement with the Innu Nation.

Martin said the market meltdown is a new challenge that will require extra patience since haste and artificial timelines helped kill Lower Churchill deals in the past.

"If we thought to ourselves ... as a company and as a province that it would be sensible or prudent or it may help the project a great deal from an interest rate perspective to wait three months or four months, we will,'' he said.

"This is a lifetime project."

The province has been waiting more than 40 years to develop the Lower Churchill. Martin said a delay of six months, even a year, isn't a big problem if it means getting the right financing deal.

If the project is fully developed it could generate power from two separate locations on Labrador's Churchill River, with enough energy to supply about 1.5 million households.