As noted in previous bulletins,1 we continue to
monitor announcements of Indigenous equity investments in energy
and related infrastructure projects in Canada. This bulletin
provides an update on trends we have observed in recent Indigenous
equity investments over the previous two years, from 2022-2024
YTD.
Indigenous equity investments in these projects are key towards
advancing economic reconciliation with Indigenous Peoples. They are
also key for managing project risk by helping to align the
interests of the parties and facilitating Indigenous support and
consent for a project.
To date, we have reviewed 135 energy and related infrastructure
projects across Canada that are partially or wholly owned by
Indigenous Peoples.2 These projects include Indigenous
equity investments in projects spanning over 15 years. However, 28%
of the Indigenous equity investments we reviewed occurred only in
the last two years, from 2022-2024 YTD.
1. Distribution of Indigenous Equity Investments Across
Canada
Canada
In a previous bulletin, we predicted continued growth of
Indigenous equity investments in Alberta given the strong financing
support available through the Alberta Indigenous Opportunities
Corporation (“AIOC”) Loan Guarantee Program.3
This prediction was correct: in 2022-2024 YTD, Alberta had the most
Indigenous equity investments in Canada, with 26% of equity
investment announcements located in Alberta. This represents a
recent trend: as reported in our previous bulletin, Alberta
comprised only 10% of all Indigenous equity investments in our
database. As anticipated, the AIOC provided funding to just under
half of these recent projects.
Nova Scotia, perhaps unexpectedly, had the second-highest number
of Indigenous equity investments in Canada, with 23% of new
announcements, the vast majority of which were wind generation.
Again, this is a recent trend: as noted in our previous bulletin,
across all Indigenous equity investments previously reported, only
10% were in Nova Scotia. As a result, some of the earlier
front-runners like Ontario have fallen behind.
New equity investment announcements in 2022-2024 YTD were for
projects located in nearly all provinces and territories, with the
exception of only PEI and Northwest Territories. The distribution
across other provinces was as follows: BC: 18%; AB: 26%; SK: 6%;
MB: 7%; ON: 8%; QC: 5%; NB: 3%; NS: 23%; YT: 3%; and NU:
1%.4
With the recent announcement of a federal Indigenous equity loan
guarantee program, as well as a program announced for British
Columbia and a loan program from Canada Infrastructure Bank
specifically to support the BC Hydro 2024 Call For Power, we can
expect to see a more equal distribution across provinces and
territories moving forward, with perhaps BC regaining some
ground.
2. Breakdown Across Sectors
Wind was the dominate sector for Indigenous equity investments
in 2022-2024 YTD, bringing in 35% of new Indigenous equity
investment announcements. Oil & gas related infrastructure
followed representing 15% of Indigenous equity investments during
this time period. Other sectors represented included solar
generation (13%), electricity transmission (13%), carbon capture,
utilization and storage (5%), battery storage and manufacturing
(5%), mining (5%), hydroelectric (3%), biofuel (3%), cogeneration
(3%).
We note that this represents a change from values reported in
our previous bulletin, which reported a near-even split between
hydroelectric and wind generation projects leading Indigenous
equity investments.5 Historically hydroelectric
generation has made up a large proportion of Indigenous equity
investments in Canada, particularly in BC. However, wind appears to
have become a much more common project type for Indigenous
investment over the last two years, particularly in eastern Canada,
which we expect is consistent with investment in the renewable
energy sector generally.
3. Project Value Relative to Equity Interest
Based on our analysis of projects where this information is
reported, it appears that minority Indigenous-owned projects tend
to be higher value than majority Indigenous-owned projects. This
trend continues to correspond with the projects announced in
2022-2024 YTD: more minority Indigenous-owned projects were related
to oil and gas infrastructure, while more majority Indigenous-owned
projects were related to lower-cost wind and solar projects. As
more funding sources become available to provide financing for
large-scale Indigenous equity investments, we expect the median
value of majority owned projects will rise to help close this
gap.
4. Number of Indigenous Communities Involved 2022-2024 YTD
We have identified at least 111 Indigenous communities that
obtained or announced an equity interest investment in 2022-2024
YTD. Of these Indigenous communities, 22% had more than one equity
investment during this time.
Notably, 49% of new equity investments were owned by only one
Indigenous community, while 51% of the new equity investments were
owned by two or more. Of projects owned by multiple Indigenous
communities, the median number of Indigenous communities involved
in a project was six, up to a high of 23 Indigenous
communities.6
5. Conclusions
We will continue to monitor announcements of new Indigenous
equity investments. With the recent federal budget announcement of
a $5 billion National Indigenous Loan Guarantee Program for
“sector-agnostic” natural resource and energy
projects,7 and other sources of loans and loan guarantee
programs becoming available, we expect to see strong continued
growth in both the number and value of Indigenous equity
investments across Canada. We also expect to see new growth in
provinces and territories that do not currently have provincial or
territorial loan guarantee programs in place.8
Footnotes
1. See “Four Trends in Equity Participation in
Canada” (6 March 2023), online: Fasken https://www.fasken.com/en/knowledge/2023/03/6-four-trends-in-indigenous-equity-participation-in-canada
and “Indigenous Equity in Energy Infrastructure Projects in
Canada” (22 November 2023), online: Fasken https://www.fasken.com/en/knowledge/2023/11/indigenous-equity-in-energy-and-infrastructure-projects-in-canada.
2. Our database includes energy and related
infrastructure projects jointly owned by an Indigenous community
and non-Indigenous partner, as well as large-scale 100%
Indigenous-owned projects (e.g. projects with a generating capacity
of greater than 1 MW, transmission lines, etc.). Note that several
new projects are announced every month; this update uses data last
updated April 15, 2024. Our analysis is based solely on publicly
available information that we have reviewed regarding Indigenous
ownership in energy and related infrastructure projects, which is
not consistently reported, and does not necessarily reflect an
exhaustive analysis of all such investments. Given the limited
information available, it is likely that some of these observations
are not statistically significant.
3. See “Indigenous Equity in Energy Infrastructure
Projects in Canada” (22 November 2023), online:
Fasken https://www.fasken.com/en/knowledge/2023/11/indigenous-equity-in-energy-and-infrastructure-projects-in-canada.
For more information on the AIOC, see our recent bulletin:
“Current and Announced Funding Programs for Indigenous Equity
in Canada” (2 April 2024), online: Fasken https://www.fasken.com/en/knowledge/2024/04/current-and-announced-funding-programs-for-indigenous-equity-in-canada.
4. Note that some projects span multiple
provinces.
5. See “Indigenous Equity in Energy Infrastructure
Projects in Canada” (22 November 2023), online:
Fasken https://www.fasken.com/en/knowledge/2023/11/indigenous-equity-in-energy-and-infrastructure-projects-in-canada.
6. See the Athabasca Trunkline, available online:
Alberta Indigenous Opportunities Corporation,
“Athabasca Trunkline” (2024), online: Alberta
Indigenous Opportunities Corporation https://theaioc.com/projects/athabaska-trunkline/.
7. See Canada, Department of Finance Canada, Budget
2024, (Ottawa: Department of Finance Canada, 2024) at PDF
299-301, online (pdf): Government of Canada https://budget.canada.ca/2024/report-rapport/budget-2024.pdf.
8. For a recent overview of current and announced funding
programs across Canada, see our recent bulletin: “Current and
Announced Funding Programs for Indigenous Equity in Canada” (2
April 2024), online: Fasken https://www.fasken.com/en/knowledge/2024/04/current-and-announced-funding-programs-for-indigenous-equity-in-canada.
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