First Nations Development

www.visionsfinancial.ca

Clean Energy and First Nations:

Had an opportunity recently to attend, and unexpectedly; speak, at the recent Clean Energy BC’s First Nations Workshop – ‘Advancing Indigenous Opportunities in Clean Energy’. It was encouraging to see the numbers of First Nation participants from across the Province, and see some familiar faces. That being said, I couldn’t help but sense the frustration by the group. What’s been happening is that First Nations, bolstered by Provincial and Federal funding, have been investing time and resources to develop projects in their territory.

Unfortunately I fear this is a road to nowhere in the current BC environment. I couldn’t help but notice that the preceding Clean Energy conference was much smaller than previous years. BC Hydro’s Standing Offer Program (SOP), for projects up to 15 MW, has as of August 2017, suspended accepting applications until further notice. With the Site C project moving ahead, creating more power generation capacity, I wonder how long this program will be suspended.

Contrast this with what is happening in Alberta and Saskatchewan. The Alberta government is currently working towards procuring 5,000 MW in clean energy by 2030. It recently announced the results of its first round of potential projects, which totalled 600 MW in wind projects.

In Saskatchewan they are promoting the development of 120 MW of solar by 2025 and 1,600 MW of new wind projects by 2030. As well, they have targeted set-asides with First Nation organizations within these targets.

Our group has developed and financed over 60 clean energy projects throughout Canada and the US, and has an interest in developing more, in partnership with First Nations.

For obvious reasons, we are focusing our efforts on opportunities in the jurisdictions that are ‘clean energy friendly’. As far as opportunities in my home province of BC…I think its time for real change, and the development of new approaches and structures that will enable economic opportunities for First Nations. Stay tuned…

www.visionsfinancial.ca

How First Nations can REALLY participate and benefit from projects in their territory

It has been 20 years since the Supreme Court Delgamuukw decision, which provided First Nations clarity on the existence of the economic component to Aboriginal Title. Meaning First Nations own the land within their territory, and this ownership has value. It is time that, we as First Nations, used all the financial tools and strategies at our disposal to realize our full economic potential.

The issue of lack of First Nation equity has been discussed for many years now, and is well documented. First Nations look at their financial statements and in most cases see limited financial possibility for investment into projects in their territory, or their own projects.

What if I was to tell you that many, if not most, large projects undertaken in Canada are being done by proponents without any effect on their own balance sheet?

In commercial investment sectors this is known as Project Financing.

Project financing is the development of a project where the bulk of the financing, both equity and debt or is repaid primarily out of the assets being financed and their revenues. Its paid solely out of the project.

According to Denton’s 2016’s ‘A guide to Project Finance’, in Canada in 2015 Project Financing was the vehicle for 72 deals worth nearly $20 Billion. Many of these projects were in the renewable energy sector, however this is a typical structure and approach for projects in other sectors such as infrastructure, resource development and large commercial and residential development.

Proponents and investors have moved towards the Project Financing model for a number of business and economic reasons. Some of the key reasons include;

• Ability to manage/share risk with other key partners
• Ability to develop a project outside of its own balance sheet, enhancing its financial capability
• Being able to invest and develop a project with limited or no recourse back to the company

For these same reasons, as well as the fact that First Nations may have limited capital to leverage, there is nothing stopping First Nations from utilizing this same approach to developing projects in their territory.

The key to a Project Financing approach is the strength of the project. The ability of the project to repay its debt, and provide a reasonable return to its investors.

For First Nations in Canada, these projects are happening throughout their territory. In some cases, First Nations are leading these projects, and in most cases (hopefully) First Nations have an opportunity to participate in them through negotiated IBA’s.

Whether it’s a mining, road, or renewable energy project; as long as it is has sound economics, First Nations can take a lead role in its development.

Ki’mola Indigenous Capital was created to enable First Nations to participate in these projects. We are creating and providing equity investment opportunities into excellent Projects  that provide very attractive returns (18%-22%). Our group has successfully created over 700 projects, many utilizing the Project Financing model.

As well, we can help First Nations to take a lead, or substantial role in projects that are being developed in their territory. The first step to this opportunity is the First Nation negotiating an opportunity to participate in the project, through an Impact Benefit, or Mutual Benefit Agreement.

We are interested in working and partnering with First Nations on projects in their territory, creating an economic opportunity for them to meaningfully participate in their project.

This is the time, in this new era of reconciliation with First Nations, for the Indigenous and investment community to come together and create new solutions. Solutions that can create economic benefits for all sides.

Gila’kasla

Michael Bonshor

Ki’mola Indigenous Capital