Manitoba Hydro is loaning the St. Joseph wind farm $260 million to rescue the shaky Southern Manitoba project.
But Premier Greg Selinger and Hydro boss Bob Brennan say the deal is a good one for Manitobans. Hydro stands to make a small profit on the 20-year loan and if the wind farm company defaults, Hydro will simply take over ownership of the turbines.
Construction of the 138-megawatt wind farm located about 100 kilometres south of Winnipeg will begin immediately. When the turbines are turning at full blast next spring, the farm will generate enough power to serve the needs of 50,000 homes.
But the project is about half the size originally planned and more than a year late and no loan guarantees or bailouts were ever envisioned.
Brennan and Selinger said the recession and the tight credit market meant the project required the loan guarantee.
The project will be built by San Franscisco-based Pattern Energy, which will invest $95 million into the project.
The St. Joseph proposal was selected from among 84 bids and will be the second wind farm in Manitoba.
Manitoba’s first wind farm, located near St. Leon and producing 100 MW of electricity, became fully operational in 2006.
Updated on Monday, March 22, 2010 at 1:39 PM CDT: Updated with more information.