Blakes, McCarthy Tétrault, Torys acting as legal counsel
Canada Growth Fund Inc. (CGF) and the Building Ontario Fund (BOF) have announced a major equity commitment to finance the Small Modular Reactors (SMR) project at the Darlington New Nuclear Project (DNNP). The project, which will be majority owned and operated by Ontario Power Generation Inc. (OPG), marks a significant step in Canada’s push for low-carbon energy.
Under the agreement, CGF will invest up to $2 billion, while BOF will contribute up to $1 billion. Both organizations will take minority stakes in the project, with CGF acquiring a 15 percent share and BOF 7.5 percent. OPG will retain majority ownership and operational control.
The Darlington project is set to become the first in the G7 nations to construct four grid-scale commercial SMRs. Once completed, the reactors are expected to deliver up to 1,200 megawatts of electricity—enough to power 1.2 million homes. The total estimated cost for the four units stands at $20.9 billion, including interest, escalation, and contingency.
CGF, a $15 billion investment vehicle, was established to attract private capital to Canada’s clean economy by absorbing certain risks and catalyzing investment in low-carbon technologies. Its assets are managed independently by Canada Growth Fund Investment Management Inc. (CGFIM).
BOF, meanwhile, is a Crown agency with an $8 billion mandate from the province to spur investment in revenue-generating infrastructure across Ontario. Its focus spans affordable and student housing, long-term care, energy, transportation, and municipal and community infrastructure.
OPG, Ontario’s largest electricity generator, employs thousands across the province and is advancing a range of low-carbon and electrification projects to meet growing energy demands.
"Through this novel financing arrangement, Canada Growth Fund is pleased to support these first-of-a-kind small modular nuclear reactors with significant potential to be replicated across Canada and globally," said CGFIM president and CEO Yannick Beaudoin. "We look forward to building upon this financing model to attract further interest from private investors committed to developing low-carbon energy infrastructure in Ontario and across Canada."
"This is a watershed moment for Building Ontario Fund and demonstrates our catalytic role in financing large-scale infrastructure projects," BOF CEO Michael Fedchyshyn said in a press release. "The transaction opens new investment opportunities in the province's energy sector and will boost competitiveness, drive job creation, and support innovation across the industrial base."
"The Darlington New Nuclear Project will help meet growing demand for low-carbon energy, and provide significant economic benefits for Ontarians and Canadians, creating jobs and securing contracts across the province's robust nuclear supply chain," said OPG president and CEO Nicolle Butcher. "Other Canadian provinces and global jurisdictions are seeking our expertise to deploy SMRs as a solution for their energy security needs, making this project a platform for further growth."
Legal and financial advisors on the transaction included Blake, Cassels & Graydon LLP for CGF and CGFIM, McCarthy Tétrault LLP for BOF, and Torys LLP for OPG. RBC Capital Markets advised CGF, CGFIM, and BOF, while CIBC World Markets Inc. advised OPG.
OPG aims to complete construction of the first SMR by the end of the decade, with grid connection planned for 2030. The remaining three units are expected to come online in the mid-2030s.
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