Reseau Express Metropolitan - CDPQ Infra, Government of Quebec, Canada Infrastructure Bank, Hydro-Quebec, Autorité Régionale de Transport Metropolotain
- Investor: CDPQ Infra, Government of Quebec, Canada Infrastructure Bank, Hydro-Quebec, Autorité Régionale de Transport Metropolotain
- Source of finance: Public and semi-private finance
- Financial instrument: Equity, loans, public contributions, public private partnership model
- Sector: Sustainable transport
- Geography: Montreal, Canada
The Réseau Express Métropolitain (REM) is a new mode of fully automated light rail transit that redefines urban mobility in Greater Montréal.
The Réseau Express Métropolitain (REM) is a 67-km, light rail, high-frequency public transit network with 26 stations located in Montreal, Canada connecting key districts, namely the South Shore, downtown Montreal, Montréal-Pierre Elliott Trudeau International Airport (YUL), the North Shore and the West Island.
Initiated by the Government of Québec and developed by CDPQ Infra, the REM was financed through an innovative blend of financing tools and risk management strategies. The potential of the REM was clear, however, there were concerns that the underlying risks, scale, and economics of the project would not align against risk and return levels expected by CDPQ, both as an institutional investor with fiduciary responsibilities and as the most significant contribute to the REM. Hence, it was pivotal to optimize the cost of capital by leveraging a blended capital pool, which included junior, minority equity investment from government, a senior secured loan with CIB, a commercial agreement with Hydro-Quebec, and contributions from ARTM, to mobilize CDPQ’s position. (CDPQ case study, see link below).
Final Insights
This huge infrastructure project demonstrates the application of blended finance approach (public and private finance) at a project level within a developed economy.
This was enabled by the dual mandate of CDPQ which, under Canadian legislation(1), invests both for the benefit of pension holders and for the long growth of Quebec.
View the full case study by CDPQ, Sustainable Markets Initiative & Investor Leadership Network (2025).
(1) Section 4.1 CDPQ Act, 2004: The mission of the Fund is to receive moneys on deposit as provided by law and manage them with a view to achieving optimal return on capital within the framework of depositors’ investment policies while at the same time contributing to Québec’s economic development.
Private Capital
The providers of private capital into blended finance transactions are usually investors with more flexibility and a higher risk appetite than institutional investors. This form of capital enables projects to build and scale up.
Sustainability for Strategic Advantage
Strategy & Transformation
Sustainability for Strategic Advantage
A one-day program for senior and mid-level executives, this course is distinct in approaching sustainability as a strategic issue, with a particular focus on climate change.