Automotive News Canada - October 2022 - 4

4
* OCTOBER 2022
To keep infrastructure
from falling behind,
a new federal program
fronts 80 per cent of
the capital cost of
projects worth
$10 million or more,
with 'no ceiling'
By DAVID KENNEDY
T ORONTO BUREAU CHIEF
THE CANADA INFRASTRUCTURE
Bank (CIB) is backing private-sector
investment in large-scale charging
networks with a $500-million program
aimed at countering Canada's
charging infrastructure deficit, widely
perceived as limiting the broader
adoption of electric vehicles.
The Charging and Hydrogen
Refuelling Infrastructure Initiative
(CHRI) looks to spur nongovernmental
investors into building charging
networks by covering up to 80 per
cent of the upfront capital costs in
exchange for usage-based repayments
to the CIB once the chargers
are powered up.
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A $500M jolt
for EV charging
The CHRI targets larger-scale
projects with multiple locations
and costs of more than $10 million.
Applicants must be revenue-generating,
and only private-sector investors
are eligible. That means cities
or other governmental actors cannot
access the funding unless working
with a private partner that is leading
the project.
The program targets the issue
" that was stopping big, fast investTodd:
By taking
much of the
financial risk,
the Canada
Infrastructure
Bank hopes
to encourage
expansion of
the nation's
EV charging
network.
FILE PHOTO
ment in the sector " by
taking on some of the
risk that private investors
have faced, given
uncertainties around
the speed and scale of
EV uptake in Canada,
said Charles Todd,
managing director of
investments with the
CIB.
" If lots of people buy
electric vehicles quickly,
and manufacturers
are able to deliver
those vehicles, then
we expect to be fully
repaid - and we expect
the private sector to be
happy because lots of
people are using their
infrastructure, " Todd
said Sept. 28 at Electric
Mobility Canada's
annual conference in
Toronto.
REPAY WHEN THERE'S
CHARGING REVENUE
" If things don't go
as expected, then we're
absorbing a big portion of that
risk for them, " Todd said. " So
you can make investment decisions
knowing that you won't
have that repayment if you don't
have the revenue associated
with it. "
As of August, the CIB said,
about 22,000 public EV chargers
have been installed across
Canada. That figure is " significantly
less than the forecasted
needs to support ZEV adoption, "
the bank said.
Funding for the $500-million
program was disclosed
this spring as part of the federal
government's 2030 Emissions
Reduction Plan, but no details
about how the CIB would dispense
the funds were shared at
the time. The CHRI also covers
private investments in hydrogen
refueling projects.
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'IMPORTANT CATALYST'
The new program should
serve as an " important catalyst "
in helping push private investment
into the charging market,
said Travis Allan, chief legal
and public affairs officer at the
Quebec-based EV charging station
manufacturer and network
operator Flo.
" The program is ambitious,
which is great, " Allan said. " It's
got a big dollar value, so that's a
really good first investment. "
The CIB will cover as much
as 80 per cent of a project's capital
costs, although the project
must be implemented within
two years. CIB coverage drops to
65 per cent in year three and 50
per cent in year four.
Once the chargers begin generating
revenue, repayments to
the CIB begin but are based on
the network's use. If utilization
is higher than forecast at the
project's outset, higher interest
rate payments are required,
allowing the CIB to " share in
some of the upside, " Todd said.
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The program will be accessed
through the same " federal window "
as Natural Resources
Canada's Zero-Emission
Vehicle Infrastructure Program
(ZEVIP), the CIB said. Investors
would also remain eligible to
tap ZEVIP for additional funding,
though only " to the extent
required for the project to
remain commercially viable, "
the bank said.
In weighing potential projects,
Todd said the CIB would
assess a private partner's capital
costs and anticipated revenue,
as well as where and when it
plans to install the chargers.
" We'll determine an estimated
amount that we can support
them for, " he said, " and we'll
negotiate a credit agreement
with them as you would with a
normal bank or financing. "
The program is ambitious,
which is great. It's got a
big dollar value, so that's a
really good first investment.
TRAVIS ALLAN
Chief legal and
public affairs officer, Flo
Conversely, if charger use
falls short of expectations,
repayments are slimmed down.
" We're explicitly taking a risk
that we may not be fully repaid
if there's not enough zero-emission
vehicles to support the
infrastructure, " Todd said.
Having " patient capital, " the
CIB expects complete repayment
of the typical loan to take about
15 years, he said.
While private-sector players
have been somewhat hesitant
to invest in public charging networks,
the CIB said businesses
such as gasoline stations and
large retailers with existing
parking footprints, as well as
upstart companies focused on
building EV charging networks,
have already expressed interest
in the CHRI.
" We have had a number of
conversations already with certain
potential proponents, " Todd
said.
Flo supports any federal
investment in the charging market,
said Allan, who would not
comment on whether the company
was among the interested
parties.
While projects must be worth
more than $10 million to qualify
for the program, Todd said,
the CIB will consider projects of
any size worth more than that
amount.
" There is no ceiling. " - ANC
Automotive News Canada - October 2022

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