Infrastructure Bank CEO Doesn't See Trans Mountain Involvement

(Bloomberg) -- The head of Canada’s new infrastructure lender said he doesn’t expect the organization will get involved in financing of the Trans Mountain oil pipeline project, citing the likelihood it will be eventually taken over fully by the private sector.

The Canada Infrastructure Bank is focused on funding projects that are in the public interest and aren’t likely to be built on commercial terms, Pierre Lavallee, the bank’s first chief executive officer, said in an interview in New York. The Trans Mountain pipeline, which has been acquired by Prime Minister Justin Trudeau’s government, will likely eventually be sold to a private buyer, he said.

“Our role is to fill a gap in a project’s balance sheet that the private sector won’t be able to fill on commercial terms,” Lavallee said at the Bloomberg Canadian Fixed Income Conference. “My own expectation is it will happen as a private transaction and it won’t need the bank’s support, but who knows.”

Trudeau’s government has restarted the approval process for the Trans Mountain pipeline after an August ruling from the Federal Court of Appeal effectively halted construction, calling the previous regulatory review “impermissibly flawed.” Canada bought the controversial pipeline, terminal and expansion project for C$4.5 billion ($3.5 billion) in May in a bid to ensure it gets built amid fierce opposition.

To contact the reporters on this story: Josh Wingrove in Ottawa at jwingrove4@bloomberg.net;Theophilos Argitis in Ottawa at targitis@bloomberg.net

To contact the editors responsible for this story: Theophilos Argitis at targitis@bloomberg.net, Chris Fournier

©2018 Bloomberg L.P.