SOMBA K'E/YELLOWKNIFE - The lack of a public sector partner in the proposed finance structure for the Con Mine Community Energy Project has one city councillor questioning his support for the geothermal project.

"I've always maintained that in order to have my support, we need to have the project validated by a private sector entity (who) would come forward and actually put some skin in the game, some actual money," said City Councillor David Wind.

The proposed financing model presented Monday was part of a recommendation for council to submit an application for a $1 million grant and $10 million low-interest loan from the federal government's Green Municipal Fund (GMF).

Council moved the recommendation to a second reading Monday night, with the understanding a $10 million to $20 million contribution from the Clean Energy Fund and traditional borrowing by the city will make up the remaining funds.

The estimated capital cost for the geothermal energy project that will heat 39 buildings in the downtown core and displace up to 7.5 million litres of heating oil, reducing annual greenhouse gas emissions by as much as 18,000 tonnes, is $60.4 million.

According to the draft 2011 budget, there is $500,000 budgeted for the project for 2011.

"I have been insisting that private sector participation will have to be part of the way that this project is structured and financed," said Wind.

"If (a private sector partner) put in 30 per cent of the capital costs or something for the project, that to me would prove the project because no private concern is going to put up $20 million unless they expect to get some return on that $20 million."

Council unanimously passed the recommendation to request expressions of interest from private sector companies wanting to partner in the community energy plan Nov. 8, but that wasn't reflected in the finance structure.

Wind said his other issue is the project focuses on providing heat to 39 buildings in the downtown core, and yet the whole city will bear the debt that is acquired for the geothermal energy project.

"If residents turn out and say, 'no I don't think we should be assuming this risk on behalf of the downtown property owners,' then I would have difficulty supporting it," he said.

While in the Priorities, Policies and Budget Committee meeting Monday, Couns. Bob Brooks, Amanda Mallon and Cory Vanthuyne raised concerns about moving forward with applying for loans when there isn't yet a full communication plan prepared for the public.

"I'm just stressing the importance of manifesting that plan as soon as we can," said Vanthuyne, pointing out he wants Yellowknife's citizens to have a clear understanding of the timeline and schedule for the project, which would begin servicing parts of the downtown core by 2013 if it moves forward.

Despite their reservations, the councillors understood administration's reasoning that there is a short window of time for the city to apply for the grant and loan.

"It's too much money to wait," said Bob Long, the city's senior administrative officer.

Coun. Mark Heyck said he is optimistic the city will receive the loan because the Green Municipal Fund has supported the city's Community Energy Plan since the beginning.

"I know from some experience with the GMF that they very much like to see projects that have started out with studies and plans that they've also funded."

If the loan receives approval, the city will hold a general plebiscite - where the city's voters are asked to accept or reject the proposal - before they can borrow the money.

The city is expecting a response to its loan application by March.

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