The Yukon will finally see its hydro grids linked with the expansion of the Mayo Dam and construction of the much-talked-about power line connecting Stewart Crossing to Pelly Crossing.

In what could be described as a Conservative love-in at cabinet head quarters in Whitehorse this morning, Brian Jean, parliamentary secretary for federal Infrastructure Minister John Baird, announced Ottawa will provide half the funding for the $142-million project.

Also on hand were Premier Dennis Fentie, Conservative Yukon Senator Dan Lang, failed Conservative election candidate Darrell Pasloski - who promised the expansion for the territory as part of his 2008 federal campaign platform - and Michael Lauer, the Yukon's member of the National Council of the Conservative Party of Canada.

Construction work is expected to create between 300 and 350 jobs.

David Morrison, the Yukon Energy Corp.'s CEO, said surveying work at the Mayo Dam for the new powerhouse is already underway, and construction is expected to begin next month.

That and the completed hydro transmission link between Stewart and Pelly Crossings will be completed by the end of 2011.

Morrison said the energy corporation will seek investment from first nations, with the balance to come from mining interests and the Yukon government with "no exposure to the ratepayer."

The energy boss added that power provision deals with mining firms Alexco and Western Copper are near completion.

Federal funding for the project comes from the new $1-billion Green Infrastructure Fund, and the Yukon is the first region in Canada to benefit, according to Jean.