I really appreciate the question. Perhaps before I respond, I will just say one sentence.
Compare your Muskrat Falls example to the REM project in Montreal for instance, which we made a loan to, as is very publicly known. The first segment has opened.
In that project, we made a loan. In that case, the caisse is the equity investor. It has billions of dollars at stake. If you were to read the press, you would find out that this project has also gone up in costs—as lot of big projects do—by more than a billion dollars.
We have not put any more money in. The caisse and its equity investment has. We're still going to get paid back. Taxpayers' money is still coming back—every penny. The extra investment that's had to happen as that project escalated is being borne by the people who should...because they are the ones who are managing the project. They have their finger on it. They own up to that. That's the difference when you engage the private sector with you.
When we make an investment, we follow an investment process. We receive proposals all the time from all parts of the country—from public sectors, municipalities, provincial governments, indigenous communities or from the private sector.
For example, with the Lake Erie connector, we were first approached by Fortis, or ITC, which is its subsidiary, because it couldn't make the math work on the project and do it in a way that was affordable to taxpayers—Ontario ratepayers in that case.
Our due diligence starts by engaging with people like the Ontario government. Is this a project they need? Do they understand the value of it? Is a project they want?
We engage with the government. We engage with the proponent.
We then do what's called a term sheet. We try to sketch out what would be the terms at a high level of an agreement. They take that to their board and we take it to ours. We get a test that this makes sense as an investment and—to MP Bachrach's questions earlier—that there's benefit to taxpayers. That's the fundamental question we're answering because our job isn't to make every last penny or dollar. It's to protect taxpayers' money, but also to get those public benefits. That's what we're assessing.
Now we have the terms of a deal and, to answer your question, now we go into a detailed due diligence. We would, as is the case in this project, hire a technical adviser to help us understand the economics. A lot of it is about understanding the market and what revenue is going to come.
I will give you a different example. If we got approached by someone who wanted to build huge wind farms in Newfoundland, create hydrogen and export it to world markets, questions we need to answer are, what's the market for that hydrogen? Are people willing to pay it? How big is that market? That's what we're investing in.
That's the type of due diligence.
To answer an earlier question, we don't have on our staff a person who is an expert on the hydrogen market in Germany. We would go hire somebody to help us get that expertise.
That's the due diligence we would do. Then we would sign a loan agreement. You can imagine that for the size of loans these are—they are hundreds of millions of dollars loans—that's a pretty substantial document. You would get expert opinion. We have a legal team, but we would get external legal advice as well.