The Infrastructure Bank wants to accelerate the adoption of zero-emission vehicles
The Canada Infrastructure Bank has an envelope of $500 million to facilitate access to charging stations recharge anywhere in the country.
The Canada Infrastructure Bank (CIB) on Wednesday launched its $500 million initiative to boost hydrogen charging and refueling infrastructure for zero-emission vehicles.
As skyrocketing inflation and supply chain bottlenecks put pressure on the zero-emission vehicle industry and the construction of infrastructure to accelerate their adoption, CIB seeks to bridge this uncertainty gap.
First announced this spring in Canada's 2030 Emissions Reduction Plan and federal budget, the initiative will support Ottawa's goal to accelerate adoption zero-emission vehicles and the addition of 50,000 new charging stations and hydrogen fueling stations in Canada, thanks to partnerships with the private sector.
One of the main barriers to the adoption of zero-emission vehicles in Canada is the lack of public charging and refueling infrastructure. In August 2022, there were approximately 22,000 public charging stations and six hydrogen refueling stations installed in the country.
In an interview, the CEO of CIB Ehren Cory reported that the bank has not yet signed agreements with private partners, but is having meetings with all parties in the charging industry.
These players include in particular traditional operators such as petrol stations, as well as companies specialized in the charging industry and retail businesses.
Even with the challenges of the supply chain we face, even in the world we find ourselves in, these economic ideas make sense, he assured.
The funding targeting the private sector is structured so that repayments are aligned with usage levels.
If utilization does not reach certain agreed levels, required repayments will be proportionally lower, and if utilization levels exceed expectations, bank performance will increase proportionally.
The BIC explained that the financing structure was intended to address the uncertainty surrounding zero-emission vehicle adoption rates faced by developers and investors.
Mr. Cory acknowledged that it could be some time before the charging projects the CIB chooses to invest in will generate revenue.
We invest in a company and the company charges for the infrastructure, and their profitability will ultimately determine how quickly we will be reimbursed for sure, he asserted.
That said, he is confident that the bank will not only be reimbursed, but will get a return.
We structured [the financing] with a deferral in the early years, and then we increased payments, including raising interest rates as usage increases throughout the life of the asset, he explained.
< p class="e-p">The mandate of the Canada Infrastructure Bank is to invest $35 billion in revenue-generating infrastructure that benefits Canadians and attracts private capital.
Since Since its founding in 2017, the bank has invested nearly $22 billion in capital in new and improved Canadian infrastructure. This total includes 7.7 billion in private and institutional investments.
Mr. Cory feels the BIC has finally found its footing.
I think we have a much better focus. We also have a very clear governance process in how we make our investment decisions where our shareholder – which is the [federal government] – sets policy goals for us, he said.
But then we run the investment business in a very commercial way with our board of directors, which is diverse, covers the whole country, covers many sectors, and has a ton of trading experience. So we are able to go faster.