Canada Infrastructure Bank invests in Réseau express métropolitain project with $1.28 billion, 15-year loan

Canada Infrastructure Bank and CDPQ Infra, a wholly owned subsidiary of Caisse de dépôt et placement du Québec, have reached a business agreement on the investment by Canada Infrastructure Bank in the Réseau express métropolitain project (REM) in Montréal, a 67-km, light rail, high-frequency network with 26 stations.

The $1.28-billion investment completes the project’s $6.3-billion financing. The agreement is subject to the execution of the final documentation.

Construction of the REM began in April 2018. The first trains are scheduled to run in the summer of 2021.

Investment highlights

• The Canada Infrastructure Bank’s $1.28-billion investment will take the form of a 15-year senior secured loan at a rate starting at 1% escalating to 3% over the term of the loan.
• Given that the Canada Infrastructure Bank’s investment takes the form of a loan, CDPQ Infra’s equity stake in the REM project will be approximately 70% and the Government of Québec’s stake will be approximately 30%.
  • Dollar amounts for both CDPQ Infra’s and the Government of Québec’s investments remain unchanged, staying at respectively $2.95 billion and $1.28 billion.
  • Returns on equity also remain the same, at 3.7% for the Government of Québec and 8-9% for CDPQ Infra.

REM project financing structure