Asset AllocationOctober 28, 2025

Canada Growth Fund Backs Ontario Nuclear Reactor Project

The Building Ontario Fund and PSP Investments’ CGF will provide a combined $2.15 billion to build four small modular reactors.

Reported by Matt Toledo

Canadian institutional investors Canada Growth Fund Inc. and the Building Ontario Fund will each take minority stakes in a small modular reactor project in Ontario, the CGF announced last Thursday.

As a part of the transaction, the Darlington New Nuclear Project will receive C$2 billion ($1.43 billion) from CGF and C$1 billion from BOF. Developers will build four small modular nuclear reactors at the Ontario site in the mid-2030s.

The project will be majority-owned and operated by Ontario Power Generation Inc. When complete, the DNNP is expected to provide 1,200 MW of energy, enough to power 1.2 million homes, per a CGF statement.

The project is expected to cost C$20.9 billion. The goal of the investments by the CGF and the BOF is to de-risk early-stage construction to make the project’s overall development more attractive to private-sector and indigenous investors.

“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 Yannick Beaudoin, president and CEO of CGF Investment Management, the CGF’s asset manager, in a statement. “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.”

A statement from the CGF noted the project’s elevated risk profile, with limited access to traditional financing: “CGF and BOF are investing at a stage where the project is exposed to certain construction and technological risks.”

The CGF is a C$15 billion public investment organization focused on supporting the clean energy economy of Canada. The fund, managed by the Public Sector Pension Investment Board of Canada, makes investments in low-carbon projects.

The Building Ontario Fund is a C$8 billion Crown agency that makes investments in revenue-generating infrastructure projects in the province.