OTTAWA (Xinhua) -- The Canadian federal government's Policy Bank said Tuesday that it has allocated 970 million Canadian dollars (776 million U.S. dollars) to build the country's first small-scale modular reactor.

The Infrastructure Bank of Canada said it had closed an agreement with Ontario Generating Corporation to develop and build a 300-megawatt small modular reactor next to the Darlington Nuclear Power Plant located in Clarington, Ontario.

The bank stated that the first phase funded by it will cover all preparations required before nuclear construction, including project design, site preparation, utility connections, etc., adding that this is its largest investment in clean energy so far.

The bank said the project will also support Canada's efforts to become a global hub for small modular reactor technology in a market valued at about 150 billion Canadian dollars (120 billion U.S. dollars) annually by 2040.

Once fully constructed by the end of this decade, the reactor will avoid approximately 740,000 tons of greenhouse gas emissions annually, which is equivalent to the emissions of nearly 160,000 fuel-powered cars.

Small modular reactors are a new class of nuclear reactors with a capacity of about 300 megawatts or less, and have a smaller footprint and shorter construction timeline, compared to conventional nuclear reactors.

Energy experts said there is no path to zero carbon emissions in the world by 2050 without nuclear power.