TORONTO - The Canada Infrastructure Bank and private-sector companies have agreed in principle to provide $260 million for improved rural internet service in southern Manitoba.

Half of the funds would come from the federal government's infrastructure bank. The other $130 million would come from DIF Capital Partners, a European group with offices in several countries including Canada.

The other participant in the Southern Manitoba Fibre project is Valley Fiber Ltd., which will be responsible for construction, installation, operations and maintenance of the new broadband service.

The partners estimate the construction phase of the project will create up to 400 jobs and there will be 50 permanent jobs within Valley Fiber, which is majority owned by DIF Capital Partners.

The Southern Manitoba Fibre project is an example of increased awareness that rural parts of Canada are in dire need of improved internet connections capable of addressing the economic, health and social needs of people living outside major urban centres.

The Manitoba project will connect up to 49,000 rural households with fibre-optic cables capable of carrying high-speed internet signals by 2024.