OTTAWA — The federal government is throwing its support behind a project to link Manitoba Hydro to western Nunavut, securing private-sector interest for a transmission line and fibre-optic connection.

"It's very important, and certainly leveraging a great, natural asset that Manitoba has," said Pierre Lavallée, the head of the Canada Infrastructure Bank, which announced Wednesday an agreement to support the proposed project with external financing.

"That has got benefits for Manitoba Hydro, and the people of Manitoba more generally," Lavallée said.

For years, the Inuit of western Nunavut have been pushing to get a 1,200-kilometre transmission line built from Gillam north through Churchill to five hamlets and a handful of mines, alongside a fibre-optic cable.

The Kivalliq Inuit Association argues this would wean their part of the territory off shipped-in diesel, as petroleum currently powers all of Nunavut. The fibre-optic link would take households with dial-up speeds to broadband standard.

KIA president Kono Tattuinee told reporters that should boost Inuit access to tele-health and online education.

We’ve felt isolated," he said. "We are going to get clean energy; we're going to get connected to the rest of Canada.

His group has partnered with the American energy company Anbaric, as well as the Ontario Teachers’ Pension Plan and the local Sakku Investments Group.

The CIB played a key role in helping the Inuit find those partners, and structure their financing. "That's the expertise that we're bringing to bear, and that we're injecting into this partnership," Lavallée said.

Anbaric transmission head Clarke Bruno said the project is pegged around $1.6 billion, with a goal of getting electricity and Internet to Rankin Inlet by 2026, followed by communities north of that large hamlet.

This marks the CIB’s ninth project since the Liberals launched the agency in 2017, and the first with a presence in the Prairies.

Manitoba Hydro said it’s still in talks with the proponent, which Lavallée said would tap into the province's abundance of power.

That would help the Crown corporation finance its projects. The Pallister government has argued that its predecessors invested too heavily in Hydro projects, leading to costly projects that require ramping up exports to pay off.

The Nunavut project would require upgrading Hydro’s infrastructure north of Gillam, as the line to Churchill isn’t adequate to carry the 230-kilovolt connection.

A year ago, Ottawa gave $1.6 million for a feasibility study that is set to wrap up next month. It will likely take a few more years of analysis and approvals before construction would get underway.

A 2015 engineering study found the project would eventually pay for itself by reducing energy costs and supporting mines, though Bruno cautioned that the scope of the project has been expanded and is under study.

Wednesday’s signing of a memorandum of understanding took place at the annual Northern Lights development conference in Ottawa, where escalator decals and large posters were promoting the project.

Northern Affairs Minister Dan Vandal was not available for an interview Wednesday, but has called the project a win-win for Manitoba and Nunavut.

He told the conference that his top priority is supporting locally led infrastructure projects in the north.

It’s not enough for northerners to merely survive; northerners need to thrive," Vandal said. "We need to close these gaps.