2017 Sustainability Report

Capital - Creating Value

Capital, our investment, project financing and asset management team, is a powerful vehicle for delivering value to clients and stakeholders. Our Capital service makes projects happen and drives our asset investments. It plays a decisive role in building sustainable landmarks that yield enduring economic and social benefits in communities long after we’ve exited our investment. 

We’re one of the world’s very few firms with world-class expertise in delivering end-to-end services for the full project lifecycle. We not only finance, design and build crucial infrastructure, we often operate and maintain it for a defined period. By producing a solid return on our investment, we’re able to increase our contribution in local communities. 

Capital focuses on identifying and developing high-performing business opportunities across our sectors. It provides equity and debt solutions to finance projects and manages our multi-billion-dollar portfolio of infrastructure investments. Over the years, our effective financing modelling solutions and strong performance in developing and delivering public-private partnerships (P3s) have garnered industry awards in both Canada and the US.  

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An experienced partner

Our Capital experts work internally across our sectors and externally with strategic financial partners, institutional investors and investment funds to promote growth opportunities. These partnerships expand our ability to invest in projects and build a portfolio of assets that creates more value. They also reinforce our global reputation as a partner of choice for large, complex projects such as our highly successful P3s in Canada.

In 2014, we developed the complex financing plan needed to secure investors for North America’s first performance-based P3 design-build-finance-rehabilitate hydroelectric project. When we finish replacing the John Hart Generating Station on Vancouver Island in 2019, it will generate 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. In November 2017, the Canadian Council for Public-Private Partnerships (CCPPP) honoured the Canada Line with the Gold Award in Service Delivery for its sustained success over eight years of operation and for catalyzing economic activity in the region.

Other recent P3 projects include the LEED® Gold-certified McGill University Health Centre in Montreal, one of North America’s leading healthcare complexes. In late 2017, the City of Ottawa picked our international P3 consortium to deliver part of the Confederation Line expansion and entrusted us to maintain this core asset until 2048. Our consortium is currently delivering the first stage of this light rapid transit system. 

An innovative infrastructure partnership

In 2017, we launched an infrastructure investment vehicle, SNC-Lavalin Infrastructure Partners LP, to efficiently redeploy capital back into development opportunities. This partnership holds our interests in a selection of mature Canadian infrastructure assets and marks our entrance into the infrastructure fund management business. 

This partnership also sets the foundation for creating new project financing vehicles to further develop our robust pipeline of projects. As the vehicle’s General Partner and Manager, we remain in charge of the assets’ long-term management. 

The SNC-Lavalin Infrastructure Partners LP reflects our proactive approach to managing our asset portfolio to optimize shareholder returns. The partnership’s initial portfolio consists of the following assets: the William R. Bennett Bridge (Kelowna, British Columbia), the Canada Line (Vancouver, British Columbia), the Southeast Stoney Trail (Calgary, Alberta), the Restigouche Hospital Centre (Campbellton, New Brunswick) and the Glen site of the McGill University Health Centre (Montreal, Quebec).

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 can leverage private-sector innovation and improve 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 during construction. 

Crosstown is Canada’s first transit project to receive green bond funding from Ontario 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. 

The Eglinton Crosstown maintenance and storage facility is aiming to achieve LEED® Silver certification. Crosstown service is scheduled to 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 the  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 bank 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.

In 2017, the City of Ottawa awarded our consortium the contract to design, build, finance and maintain part of the line’s Stage 2 expansion.

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