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Creating Jobs and Promoting Economic Sustainability for Aboriginal People with the Aboriginal Loan Guarantee Program

Archived Backgrounder

Creating Jobs and Promoting Economic Sustainability for Aboriginal People with the Aboriginal Loan Guarantee Program

Ministry of Energy

The $250 million Aboriginal Loan Guarantee Program supports Aboriginal participation in new renewable green energy infrastructure like wind, solar and hydroelectric.

By participating in renewable energy projects, First Nation and Métis communities can benefit from jobs and training as projects are developed and from dividends once projects come into service. The program includes both energy generation and electricity transmission projects.

Aboriginal communities have expressed interest in participating in renewable infrastructure, but have identified access to capital as a barrier. The program, announced in the 2009 Ontario budget, is designed to overcome this by guaranteeing up to 75 per cent of an Aboriginal corporation's equity in an eligible project up to a maximum of $50 million per project.

The Ontario Financing Authority (OFA) would administer the program. The OFA is an agency of the Ministry of Finance responsible for managing the investment of funds and financial risk for the province. The OFA participated in the consultation process with Aboriginal groups, other ministries, electricity agencies and banks in the development of the program. Program details, including the application and review process, will be available in the fall of 2009.

Loan guarantees would be granted to commercially viable projects following an extensive due diligence process. The criteria would be stringent and the process would ensure that only eligible projects' loans are guaranteed. A project would be required to have:

  • Agreements in place to sell or transmit electricity at a pre-determined cost (e.g. power purchase agreements for generation or regulated rates for transmission projects)
  • Experienced proponents and business partners with track records in construction and infrastructure operation 
  • Secured commercial financing arrangements 
  • Aboriginal communities would be required to create wholly-owned corporations to take on all aspects of the project, such as signing contracts and entering partnership agreements.

The program complements other government initiatives, such as the Green Energy Act, which has made Aboriginal participation in electricity projects a priority.

The government is also launching an Aboriginal Energy Partnerships Program. This program would be managed by The Ontario Power Authority (OPA). The OPA's mandate is to ensure a reliable, sustainable, long-term supply of electricity for the province. This program would build energy capacity and support participation through assistance with community energy plans, funding for feasibility and the development of an Aboriginal Renewable Energy Network.

Alicia Johnston, Minister's Office, 416-325-3645

Scott Blodgett, Ministry of Finance, 416-325-0324



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