DISTRICT OF MUSKOKA COUNCIL PRESENTATION RE: CONNECT TO INNOVATE HIGH SPEED FIBRE OPTIC APPLICATION CHRIS LITSCHKO, CEO LAKELAND HOLDING LTD. (LAKELAND ENERGY/NETWORKS) March 20, 2017
OPPORTUNITY: Connect all 6 Municipalities and 1 First Nation Community together with Ontario s fastest high speed fibre optic communications network POSSIBILITY: Through Federal Government s $500M Connect to Innovate application NEED: $10M Loan from District of Muskoka for application and potential project
SHAREHOLDERS Bracebridge, Huntsville, Parry Sound, Burk s Falls, Sundridge, Magnetawan LAKELAND HOLDING LAKELAND POWER BRACEBRIDGE GENERATION LAKELAND ENERGY (NETWORKS)
Mission: Become the NUMBER ONE Communications Company in the area Objective: Respecting the Natural Environment, Continually Grow and offer Best in Class Products and Services that Support the Expansion of our Broadband Networks
CONNECT TO INNOVATE - $500M program by Federal Government - High Speed Internet to Rural & Remote Communities *District of Muskoka qualifies - $25.4M Application closes April 20 th - Federal Gov t = 75% capital recovery - Project = 3,426 customers on TRUNK Lines (Phase 2 ~2,050) - Why? all Municipalities have shown interest - Project completion March 31, 2021 = Tight Deadline
FIRST PRIORITY - Demonstrate have secured other funding - Community Financial Support = Favourable Rating - Lakeland not large enough require Loan assistance from District of Muskoka $15M required: $10M District of Muskoka $5M Internal Lakeland Investment
SMALL COMMUNITIES FUND EXPERIENCE (2016) - 1/3 Partnership with Federal & Provincial Governments - $8.6M over 5 years - 215 kilometers passing 3,300 customers in Bracebridge & Huntsville - Offering fastest internet in Canada at 1 Gigabit and Free phone - 35% initial connections require 50% but connecting >55% of customers Project ahead of schedule 25% of project should be completed 70% of project constructed 1,284 contracts Utilizing this Success for Connect to Innovate!
CONNECT TO INNOVATE FIBRE PROJECT New Fibre Trunk Backbone construction balances connection of: - All 6 District Municipalities & Wahta First Nation - Anchor Points : schools, medical health care providers, colleges, public housing, other educational institutions, community support organizations, government facilities, Band offices, community centres, public safety institutions (fire & police), other. - 155 Anchor points in District of Muskoka - Densely populated routes
DISTRICT OF MUSKOKA PROJECT DETAILS - Route = 275 kilometers - Passes 3,426 potential customers (Phase 2 ~2,050) - Connects 1 First Nation - Connects all District of Muskoka Municipalities - Connects 155 Anchor points (18 DOM) - Fibre is Open Access available for others to lease
PROJECT MAPS
MUNICIPALITY BUILD KMS CUSTOMERS PASSED Bracebridge 3 14 Gravenhurst 39 554 Georgian Bay 43 440 Huntsville 18 193 Lake of Bays 34 403 Muskoka Lakes 129 1751 Wahta FN 9 71 District of Muskoka 275 3,426
FIBRE OPTIC COMMUNICATIONS Benefits Bandwidth Fastest Speed Data Security Reliability Resistance to Interference Cost Savings Video Business Competitiveness Employment Business Development Qualify of Life Property Values Education Services Health Services Larger Tax Base Investment Stays Local Other products/services Business Attraction Local Fibre Solution Retain Population Economic Development
LOAN REQUEST FROM DISTRICT - Federal Connect to Innovate Project = $25.4M - Lakeland Board & Shareholders approved application - Some District Loan required upfront = high capital investment in early stages - District Loan Request = $10M (money stays within District)
DISTRICT OF MUSKOKA LOAN DRAFT TERMS - Loan = $10M - Interest Rate HIGHER of: 1) 3% or 2) District Bond + 0.5% (District protected) Tranche One Q4 2017 = $3M Tranche Two Q2 2018 = $7M $10M
DISTRICT OF MUSKOKA LOAN DRAFT TERMS Loan = $10M Repayment Q4 2018 Q2 2019 Q4 2019 Q2 2020 = $1.5M = $3.5M = $1.5M = $3.5M $10M
CONCLUSION o - Connect to Innovate Application due April 20 th o - Summer 2017 Award o - Will start construction asap in 2017 o - Asking $10M District Loan: *275 kilometers of fibre optics *3,426 customer potential (Phase 2 ~2,050 customers) *Connect all District Municipalities + 1First Nation *Benefits: District, Municipalities, Residents, Businesses, etc.
Local Fibre Optic Solution in conjunction with the District to provide Canada s FASTEST internet service throughout the District of Muskoka
QUESTIONS & ANSWERS