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Minister of Infrastructure and Communities Catherine McKenna rises during question period in the House of Commons on Parliament Hill in Ottawa on March 26, 2021.Sean Kilpatrick/The Canadian Press

The Canada Infrastructure Bank will work with a global infrastructure investing company on a $260-million project to expand rural broadband connections in Manitoba, the federal Crown corporation announced Friday.

Earlier this week, Parliamentary Budget Officer Yves Giroux released a report noting that the bank had failed to produce any examples of attracting private investors to support Canadian projects, even though that was the Liberal government’s core rationale for creating the bank four years ago.

The Southern Manitoba Fibre project will involve 2,550 kilometres of fibre-optic cabling and will connect up to 49,000 rural households.

The cost of the project will be split evenly, with the bank contributing $130-million and DIF Capital Partners contributing $130-million, according to an agreement in principle announced Friday via a news release.

The project also includes Valley Fiber Ltd., a Winkler-based internet provider. The agreement is expected to be finalized in the spring, with construction starting later this year. The project is scheduled to be completed in 2024.

The announcement is the bank’s first in the broadband sector and its first project in Manitoba.

DIF Capital Partners is a global infrastructure fund manager with more than $12-billion in assets.

It is an example of the large institutional investors that the federal government had in mind when it launched the bank.

The bank was created in 2017 with a 10-year budget of $35-billion and a mandate to invest in revenue-generating projects that are in the public interest. The premise was that the bank would attract large private investors and global pension funds to direct their infrastructure capital toward Canadian projects.

The PBO report said that only five of the bank’s 13 projects announced to date included a financial contribution. The total financial commitment to those five projects was just over $4-billion. It also said none of the projects involved private funding.

Infrastructure Bank chief executive officer Ehren Cory said in an interview earlier this week that the bank had eight new projects that would be announced prior to Canada Day and that some would include contributions from pension funds and private investors. Friday’s announcement is the first of the eight.

Mr. Cory, who was announced as CEO in October, faced sharp criticism this week at a parliamentary committee, where opposition MPs said the bank has fallen well short of what the government promised.

Last month, Liberal Infrastructure Minister Catherine McKenna announced new priorities for the bank. Specifically, the bank now has a mandate to allocate $10-billion from its existing budget over the next three years in five areas: zero-emission buses; clean power; building retrofits; large-scale broadband projects and agriculture-related infrastructure.

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