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Canadian government bank provides opportunities for pension funds to invest in infrastructure

Opportunities exist in Canadian infrastructure equity if asset owners tap the country's government-created bank to find and finance new opportunities in the asset class, a bank official said Wednesday.

"We're often asked why pension funds don't invest in Canada," said Bruno Guilmette, board member and former chief investment officer of Canada Infrastructure Bank, at the Association of Canadian Pension Management Conference in Quebec City. "It's because there haven't been a lot of opportunities for private investment in Canadian infrastructure."

What the bank provides, Mr. Guilmette said, is a national infrastructure product inventory list of projects that are looking for private and institutional investment, and loans that will "bridge the investment gap … to help get projects off the ground."

The sectors targeted by CIB are green infrastructure, public transit and trade-related transportation, Mr. Guilmette said.

The bank was created in June 2017 to facilitate more private investment in Canadian infrastructure projects. CIB, which has C$35 billion ($26.8 billion) from the federal government but operates independently, provides advisory services to private and institutional investors on potential public infrastructure projects that will produce user-generated revenue once they're completed.

One of the bank's earliest example of assistance is a C$1.28 billion financing deal with the Quebec provincial government and the C$308.3 billion Caisse de Depot et Placement du Quebec, Montreal, to build and operate Reseau Electrique Metropolitain, a 42-mile light-rail transit system linking Montreal with three suburban areas as well as the Montreal-Pierre Trudeau International Airport. CIB's 15-year loan matches the C$1.28 billion contribution of the Quebec government, while Caisse, which manages provincial pension and other assets, will invest C$3.56 billion, Mr. Guilmette said.

The bank is looking for more infrastructure projects as well as institutions seeking financing help to invest in them, he said.