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CIB, Fiera invest in $200M SOFIAC for energy-efficient retrofits

The Canada Infrastructure Bank (CIB) and Fiera Private Debt will invest up to $160 million in the...

SOFIAC, CIB, Fiera Private Debt, Econoler, Fondaction, MERN, retrofits

CIB and Fiera have invested $200M in SOFIAC for energy-efficient retrofits (Courtesy, SOFIAC).

The Canada Infrastructure Bank (CIB) and Fiera Private Debt will invest up to $160 million in the Société de financement et d’accompagnement en performance énergétique du Québec s.e.c. (SOFIAC) for retrofits, the largest energy efficiency initiative in Canada.

CIB will lend up to $100 million while Fiera will provide up to $60 million for the initiative, which has a total budget of up to $200 million. The funding will go toward modernizing commercial, industrial and multi-residential buildings in Quebec and reducing greenhouse gas (GHG) emissions.

The retrofits will be provided to building owners whose overall annual energy costs exceed $1 million.

“We are pleased to announce our investment in SOFIAC, an innovative financing model that will enable large-scale retrofit projects to be carried out with no up-front investment from building owners,” said Ehren Cory, president and chief executive officer of CIB in a release.

“This is a promising initiative that fits perfectly with the $2 billion Green Infrastructure Initiative and will have a long-term material impact on infrastructure and economy in Canada.”

SOFIAC improves energy efficiency in Quebec businesses

SOFIAC strives to improve the energy performance of buildings and industrial processes for Quebec businesses, while also helping them increase profitability and competitiveness by reducing energy consumption and costs.

The society is an initiative of Econoler and Fondaction and was launched in 2020 along with the support of the Ministère de l’Énergie et des Ressources naturelles du Québec (MERN).

“Because of these major investments, SOFIAC will continue to develop as an innovative mechanism for breaking down barriers that could impede the implementation of energy efficiency projects for buildings in Quebec’s private sector,” said Pierre Langlois, president of Econoler in a release.

“SOFIAC will considerably accelerate the implementation of energy efficiency measures in Quebec businesses and will play a key role in ensuring an efficient and profitable energy transition.”

The rest of the funding will come from Fondaction, which plans to invest up to $30 million in share capital, while MERN will grant a subsidy of $5.5 million.

SOFIAC is helping to achieve the MERN 2030 Energy Policy’s objectives — which aim to increase energy efficiency by 15 per cent and reduce petroleum product consumption by 40 per cent — as well as the objectives under the Pan-Canadian Framework on Clean Growth and Climate Change in compliance with Canada’s commitments under the Paris Agreement.

The SOFIAC business model

SOFIAC’s business model drives the development, finance and implementation of energy efficiency projects and carbon footprint reductions for clients, which include:

– Quebec commercial and industrial sector businesses and multi-unit residential building owners;

– businesses with annual energy expenses of $1,000,000 or more for a portfolio of buildings and/or plants;

– businesses interested in reducing their energy consumption, environmental footprint and GHG emissions.

SOFIAC’s energy cost reduction target ranges from 25 – 40 per cent per project, which should reduce greenhouse gas emissions by 30 – 50 per cent.

The projects, to be implemented within the next five years, are estimated to enable an annual reduction of 20,000 tonnes of GHG emissions.

“SOFIAC is extremely pleased today to have reached this crucial milestone,” said Michel Méthot, general manager of SOFIAC in a release. “We will be the link between available capital and clean energy market forces. With our zero-cost implementation mechanism, we will generate significant cash flows for our clients.

“With our turnkey offer and our sound expertise in cleantech deployment, we are breaking down barriers today and enabling our clients to acquire leading-edge facilities that are key to decarbonizing our economy.”

About the partners

Econoler is an international firm with 40 years of experience in the design, implementation, evaluation and financing of energy efficiency and renewable energy projects. The company has contributed to developing and implementing approximately 4,000 projects in over 160 countries.

Fondaction helps citizens of Quebec save for retirement and invests this capital in local small- and medium-sized businesses (SMEs). It helps make the Quebec economy more efficient, inclusive, equitable and greener.

Fondaction manages a total of $2.96 billion in net assets invested in several hundred companies and in financial markets, prioritizing investments creating positive economic, social and environmental impacts.

CIB is mandated to invest $35 billion in federal funding and attract private sector investment in infrastructure projects that are in the public interest and support Canada’s economic growth. CIB’s 2020 Growth Plan calls for $2 billion to be invested in building retrofits.

Fiera provides short-term loans to real estate developers or property owners, short- to mid-term loans to mid-market businesses and long-term senior secured investment grade corporate and infrastructure loans. The company currently has more than $2.6 billion in assets under management.

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