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ST. JOHN’S, N.L. – A deal to finalize a term sheet to develop the Muskrat Falls hydroelectric project in Labrador has been reached, sources told The Canadian Press on Monday.

The deal to build the project, expected to cost more than $6.2 billion, is between the province’s Crown energy company Nalcor and Nova Scotia private utility Emera (TSX:EMA).

Two sources say the governments for the two provinces are expected to announce details on Tuesday.

Both governments have called news conferences to make energy announcements on Tuesday. A spokeswoman for Nova Scotia’s energy minister wouldn’t say if the announcement in Halifax was related to Muskrat Falls.

The two utilities have a joint plan to harness energy from the lower Churchill River in Labrador and bring it to Newfoundland and the mainland using subsea cables.

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The two sides announced a term sheet in November 2010 for the complex project but then missed a one-year deadline and an extension to reach a final agreement as they worked out details.

Newfoundland and Labrador is to hold a political debate this fall before deciding whether to sanction the project.

Under conditions of the term sheet, Nalcor would spend $2.9 billion to build a power generating facility at Muskrat Falls to produce 824 megawatts of electricity.

Emera would fund a 180-kilometre subsea link between Cape Ray, N.L., and Lingan, N.S., at a cost of $1.2 billion.

A further $2.1 billion would be spent to build a transmission link from Labrador to Newfoundland, $600 million of which would be provided by Emera.

Nova Scotia would get 170 megawatts of energy a year, about 10 per cent of the province’s total energy needs, for 35 years.