Building what matters, sustainably – 2016 Sustainability Report

Capital - Creating Value

Capital - Creating value

Capital, our investment and asset management group, makes projects happen and drives our community investments. It plays a decisive role in building sustainable landmarks that yield enduring benefits to communities long after we’ve exited our investment. Capital helps create projects that are economically viable and generate both sustainable value and a positive social impact for decades to come. 

We not only finance, design and build these landmarks, we often operate and maintain them for a defined period. These activities produce a return that allows us to make further contributions to local communities.

Capital focuses on increasing our investment activities in our four sectors, providing equity and debt solutions to finance projects, and managing our multi-billion-dollar portfolio of infrastructure investments. Our effective project financing solutions have earned industry awards in both Canada and the US. 

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An integrated, proactive asset developer and manager

Our Capital experts work internally across our sectors and externally with strategic financial partners to proactively develop new business and investment opportunities. Capital integrates and expands our full life-cycle asset management capabilities. It reinforces our global reputation as a partner of choice for large, complex projects such as our highly successful public-private partnerships (P3s) in Canada.

We’re replacing the John Hart Generating Station on Vancouver Island, which, when completed, will deliver significant triple bottom-line benefits. We also delivered and now operate and maintain the Canada Line in Vancouver, the country’s first major rapid rail project to use a P3 model. Other recent examples include the McGill University Health Centre in Montreal, one of North America’s leading healthcare complexes, and the Maison Symphonique de Montréal, one of the world’s most beautiful symphony halls.

Focused on value

Capital strategically monetizes our assets to maximize return on equity for SNC-Lavalin. It seeks to generate enhanced value by enabling new projects in our four sectors and optimizing their life cycles. It also strengthens our focus on first-class asset management and on structuring investments to earn a return on capital in line with each project’s risk profile.

Through Capital, we invest wisely to create value for all involved. We monetize mature assets, redeploy funds and provide access to new sources of development funding and equity. Cross-sector project financing teams target projects with direct engineering, construction and operations and maintenance opportunities.

Our P3 expertise in action

The global challenge of finding ways to close the ‘infrastructure gap’ and build or upgrade critical and aging infrastructure in urban centres has never been greater. Today, the P3 model of public-private partnerships is widely recognized as an effective way to finance, design, build, operate and maintain major infrastructure projects. 

P3s help optimize cost benefits, schedule certainty and asset availability. They also transfer risk to private-sector partners without sacrificing environmental compliance, quality and safety. P3 partnerships leverage private-sector innovation and efficiency by integrating the design, construction and operations and maintenance phases. The result is greater value for money for both public-sector partners and the communities they serve. 

At SNC-Lavalin, we’ve been spearheading successful P3 projects across Canada since 1999. Here are some recent examples of our P3 expertise in action.

 

eglinton-thumbnail-1Toronto’s largest transit expansion 

In 2015, the Ontario government selected our consortium Crosslinx Transit Solutions General Partnership to design, build, finance, maintain and rehabilitate the Eglinton Crosstown LRT line. The 19-kilometre rail corridor includes 10 kilometres underground and 25 stations and stops along a major artery.

The project will ease traffic and congestion, move people up to 60% faster than existing bus services and handle more than 10 times as many passengers. It will also create thousands of jobs. Crosstown is Canada’s first transit project to receive green bond funding for environmentally friendly infrastructure. 

This ‘first’ earned Crosstown a 2015 Gold Award in project financing from the Canadian Council for Public-Private Partnerships (CCPPP). In 2016, it won a Silver Award for Best Transit and Aviation Project from P3 Bulletin, a magazine and website focused on infrastructure P3s around the world. Crosstown service will begin in 2021.

Changing Montreal’s skylinechamplain-thumbnail

Every year, some 50 million vehicles cross Montreal’s Champlain Bridge. In 2015, the Canadian government chose Signature on the Saint-Lawrence Group to replace this important aging gateway. As the partnership’s major equity partner, we’ll design, build, finance, operate, maintain and rehabilitate the Champlain Bridge Corridor.

The 8.4-kilometre highway corridor is one of North America’s largest infrastructure projects. It includes a new 3.4-kilometre Champlain Bridge, designed to last 125 years, as well as a new 470-metre Île-des-Soeurs Bridge. Our team developed innovative and environmentally sound solutions to meet the project’s challenging schedule while creating an iconic structure that will enhance Montreal’s skyline for decades to come. 

The New Champlain Bridge Corridor Project received a CCPPP Gold Award for effective procurement in 2015. In 2016, it earned a Gold Award for Best Road/Bridge/Tunnel Project in America from P3 Bulletin.

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john-hart-thumb.jpgInnovating in B.C.’s power sector

In operation since 1947, the John Hart Generating Station supplies British Columbia’s Vancouver Island with about 11% of its electricity. In 2007, BC Hydro began planning the station’s replacement to reduce significant seismic, station reliability and downstream fish habitat risks. In early 2014, the provincial electric utility chose our InPower BC P3 partnership to design, build, maintain, rehabilitate and partially finance an innovative underground powerhouse that will enhance public safety and improve the site’s environmental footprint.

John Hart is the first performance-based P3 model used for a hydroelectric project in North America. InPower BC developed a sophisticated financing plan that enabled investors to feel comfortable with the project’s unique risks and risk allocations. 

Once completed, the entire station will be underground, restoring this part of the Campbell River to its natural beauty. In 2015, John Hart won the Judges Award for Best P3 Project at the P3 Awards in New York City.

Bringing light rapid transit to Canada’s capital

confederation-line-thumbnail

As part of the Rideau Transit Group (RTG), we were selected in late 2012 to design, build, finance and maintain Confederation Line, Ottawa’s first light rapid rail transit system. The Confederation Line is one of North America’s biggest P3 rail transit projects. It’s also Ottawa’s largest infrastructure project since the building of the Rideau Canal in 1832. 

The Confederation Line will convert the existing Ottawa Bus Rapid Transit corridor into a full LRT system as well as widen and rehabilitate four kilometres of Ontario’s Highway 417. The project’s first phase includes 12.5 kilometres of guideway, 10 above-ground and three underground stations and a 2.5-kilometre tunnel beneath Ottawa’s downtown core.

Our robust financing solution featured short-term and long-term debt as well as equity capital, along with Canada’s first fully underwritten, unrated, long-term placement loan. This innovative project financing structure earned RTG North America’s Public-Private Partnership 2013 Deal of the Year from Project Finance Magazine. Among other awards, the Confederation Line also won the Silver Award for Best Rail/Transit Project from P3 Bulletin in 2014. Scheduled to begin service in 2018, the new light rail system will significantly reduce pollution and traffic congestion in Canada’s capital.

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