Ontario announces two programs to enhance aboriginal participation in the new green economy

Climate Change Law Practice Group Blog

September 08, 2009

Last week, Ontario announced the early closure of 4 of OPG's coal-fired generating units. The Ministry of Energy and Infrastructure described the announcement as the first of its 10 steps to "transition the province to electricity generated from green energy which will open investment and opportunities in Ontario's green economy." The Ministry announced steps 2 and 3 last Friday.

The latest steps, which will facilitate the participation of Aboriginal communities in Ontario's new green economy, are the creation of the following:

1) An Aboriginal Loan Guarantee Program

This $250 million program will offer loan guarantees for up to 75% of an Aboriginal corporation's equity interest in a renewable power project. The guarantees will make it easier for Aboriginal communities to take on equity participation in renewable generation and transmission projects. Aboriginal equity participation can make projects more lucrative. Under the OPA's FIT program, projects with greater than 20% Aboriginal equity participation are eligible for a FIT price adder.

While details of the program have yet to be announced, the Ministry indicated that projects would have to undergo a "extensive due diligence process." Projects will have to meet "stringent" eligibility criteria, including the following:

  • 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; and
  • 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 Ontario Financing Authority will manage the program.

2) An Aboriginal Energy Partnerships Program

The AEPP will support Aboriginal communities that wish to participate in Ontario's new green economy by providing the following:

  • Support for Community Energy Plans. A Community Energy Plan will allow Aboriginal communities to determine local interests, needs and opportunities for renewable energy development, conservation, grid connection and reducing reliance on diesel in remote communities;
  • Support through funding project pre-feasibility and feasibility studies, development of business cases, resource assessment, environmental and technical studies as well as other soft costs for First Nation and Métis energy projects; and
  • Support to establish the Aboriginal Renewable Energy Network, an online based centre for sharing of knowledge and best practices related to First Nation and Métis green energy projects.

The Ontario Power Authority will manage this program.