VICTORIA -- The British Columbia government has approved an environmental assessment certificate for the massive $7.9-billion Site C hydroelectric dam on the Peace River.

Environment Minister Mary Polak and Forests and Lands Minister Steven Thomson issued a joint statement saying that the Site C dam is in the public interest and the benefits outweigh the risks of significant adverse environmental, social and heritage effects.

In a brief news conference Polak said she believed there had been adequate consultations with aboriginal groups.

Polak said the government has yet to decide to proceed with the project.

"Government, broadly, still needs to make a decision with respect to a final investment decision," she said.

The minister said she could not pre-judge the what the cabinet would decide.

The environmental certificate comes with 77 legally binding conditions that the Crown utility B.C. Hydro must meet in order to build the dam.

Among the conditions are that a $20-million dollar compensation fund be established for lost agricultural lands and activities, the development of an aboriginal business participation plan, and that protocols be set up to mitigate adverse effects to wildlife and its habitat.

The federal government still needs to issue an environmental certificate and the final decision would have to be made by the provincial government by November.

A joint review panel report released in May concluded that replacing a portion of the Peace River with an 83-kilometre long reservoir would cause significant adverse effects on fish, their habitat, and a number of other species, plants and sensitive ecosystems.

The report also said the project would significantly impact the current use of land and resources traditionally used by First Nation and the effect of that on treaty rights would have to be weighed by government.

However, the panel concluded that the province will need new energy and new capacity at some point and the dam would provide a large amount of inexpensive power, low in greenhouse gas emissions.

The dam would produce 1,100 megawatts of capacity every year, enough to power about 450,000 homes.

B.C. Energy Minister Bill Bennett has said that if the project were approved construction could start as early as this January, with a completion date of 2024.