The DNNP will see the construction of four grid-scale commercial SMRs – a first among G7 nations – that, when completed, are expected to deliver up to 1,200 MW of reliable, affordable, and low-carbon electricity, enough to power 1.2 million homes. CGF and BOF are investing in this world-leading energy infrastructure project to de-risk the construction and operation of the first SMRs. Leveraging their unique investment mandates, both organizations are bringing forward innovative financial arrangements to temporarily share certain risks that currently limit private sector interest today. As a result, this transaction is paving the way to spur private sector and Indigenous investment in the DNNP over time.
The investment will also reinforce Canada's robust nuclear supply chain, inject hundreds of millions of dollars into Ontario's industrial supply chain, contribute to the resilience of Canada's low-carbon electricity grid, and foster a new generation of Canadian nuclear expertise.
Transaction details and public benefits
- OPG remains the majority owner and operator of the DNNP, with CGF and BOF acquiring meaningful minority stakes in the Project, representing 15% and 7.5% ownership, respectively.
- CGF's and BOF's capital will be made available, subject to the satisfaction of conditions, to OPG in two tranches: 1) initial capital funding of SMR 1; and 2) additional capital to fund SMRs 2–4 once the Project meets certain milestones.
- OPG expects to complete construction of SMR 1 by the end of the decade and connect it to the grid by the end of 2030. Construction on SMRs 2-4 is expected to be completed in the mid-2030s.
- As a first-of-its-kind project, DNNP has a higher risk profile that limits access to traditional financing. In line with their mandates, CGF and BOF are investing at a stage where the Project is exposed to certain construction and technological risks.
- CGF and BOF investments aim to de-risk DNNP and advance it to a point where private sector participation can be efficiently catalyzed in this essential energy infrastructure asset.
- DNNP represents a compelling opportunity for CGF and BOF to invest in a large-scale rate-regulated asset with rates subject to oversight and approval by the Ontario Energy Board.
- According to the Conference Board of Canada, DNNP will create up to 18,000 Canadian jobs annually through the construction phase, while adding $38.5B to Canada's GDP over the next 65 years.
- The current estimate to construct four SMR units at DNNP is $20.9B, including interest, escalation, and contingency.
- CGF and BOF will benefit from market-based investment governance, facilitating future participation from private investors.
- During project development OPG continues to build respectful, collaborative relationships with the communities of the Williams Treaties First Nations, advancing conversations at the pace set by the Nations.
Quotes
"Through this novel financing arrangement, Canada Growth Fund is pleased to support these first-of-a-kind small modular nuclear reactors with significant potential to be replicated across Canada and globally," said Yannick Beaudoin, President and CEO of Canada Growth Fund Investment Management Inc. (CGFIM). "We look forward to building upon this financing model to attract further interest from private investors committed to developing low-carbon energy infrastructure in Ontario and across Canada."
"We are delighted to bring PSP Investments' rigorous investment process, depth of expertise, operational excellence and arm's length governance model to the execution of CGF's mandate," said Deborah K. Orida, President and Chief Executive Officer of PSP Investments. "With today's announcement, CGFIM continues to position CGF as a leading investor in the Canadian ecosystem, with a keen focus on unlocking important projects, improving Canada's investment climate, and contributing to PSP's foresight on the evolution of the energy sector."
"This is a watershed moment for Building Ontario Fund and demonstrates our catalytic role in financing large-scale infrastructure projects," said Michael Fedchyshyn, CEO of Building Ontario Fund. "The transaction opens new investment opportunities in the province's energy sector and will boost competitiveness, drive job creation, and support innovation across the industrial base."
"The Darlington New Nuclear Project will help meet growing demand for low-carbon energy, and provide significant economic benefits for Ontarians and Canadians, creating jobs and securing contracts across the province's robust nuclear supply chain," said Nicolle Butcher, OPG President and CEO. "Other Canadian provinces and global jurisdictions are seeking our expertise to deploy SMRs as a solution for their energy security needs, making this project a platform for further growth."
About the Canada Growth Fund
Canada Growth Fund (CGF) is a $15 billion arm's-length investment vehicle designed to attract private capital to build Canada's clean economy. It uses investment instruments that absorb certain risks to catalyze private investment in low-carbon projects, technologies, businesses, and supply chains. Visit www.cgf-fcc.ca for more information. For CGF's Media relations, contact [email protected].
About Canada Growth Fund Investment Management
In Budget 2023, the Government of Canada appointed PSP Investments, through a wholly owned subsidiary, to act as the asset manager for CGF. Canada Growth Fund Investment Management Inc. serves as the independent and exclusive asset manager for CGF.
About Building Ontario Fund
Building Ontario Fund (BOF) is a board-governed Crown agency with a mandate to catalyze investment in revenue-generating infrastructure projects across Ontario. Backed by $8 billion in funding from the province, BOF supports transformative projects in five priority sectors: affordable and student housing, long-term care, energy, transportation, and municipal and community infrastructure. Through innovative financing and partnerships with institutional investors and Indigenous communities, BOF helps unlock private capital to deliver high-impact infrastructure. Established under the Building Ontario Fund Act, 2024, BOF is building a stronger, more resilient province for today and future generations. Learn more at buildingonfund.ca and follow us on LinkedIn @buildingontariofund.
About Ontario Power Generation
As Ontario's largest and one of North America's most diverse electricity generators, OPG invests in local economies and employs thousands of people across Ontario. OPG and its family of companies are advancing the development of new low-carbon technologies, refurbishment projects and electrification initiatives to power the growing demands of a clean economy. Learn more about how the company is delivering these initiatives while prioritizing people, partnerships and strong communities at opg.com.
Advisors
Blake, Cassels & Graydon LLP acted as legal advisors to CGF and CGFIM in connection with CGF's investment.
McCarthy Tétrault LLP acted as legal advisors to BOF in connection with BOF's investment.
Torys LLP acted as legal advisor to OPG in connection with this transaction.
RBC Capital Markets acted as financial advisor to CGF, CGFIM and BOF in connection with CGF's and BOF's investments.
CIBC World Markets Inc. acted as financial advisor to OPG in connection with this transaction.
PSP Investments' Conflict of Interest Policy
PSP Investments has established a policy to address the risk of any real, potential or perceived conflicts of interest in the context of the services provided by CGFIM to CGF, requiring PSP Investments and CGF to disclose where they have overlapping investments.
At the time of the approval of the transaction, PSP Investments held (i) ownership stakes in each of GE Vernova Inc. and Hitachi, Ltd., the ultimate parent companies of the technology developer in respect of the DNNP, of approximately 0.01% and less than 0.2%, respectively, held through various portfolios in the context of its ordinary course public market activities, including through externally managed portfolios over which PSP Investments has no investment discretion and (ii) an ownership stake in AECON Group Inc., the ultimate parent company of the constructor in respect of the DNNP, of less than 0.5% held through a private fund where PSP Investments has no management discretion. In each instance, PSP Investments' investment carries no governance or decision-making ability.
The foregoing is being disclosed in accordance with PSP Investments' Conflicts of Interest Policy.
SOURCE Canada Growth Fund Inc.
Erin Flanagan, [email protected]
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