Infrastructure Bank, First Nations Bank join forces to support smaller scale Indigenous development
Story by The Canadian Press • 15h
Indigenous communities looking to advance infrastructure projects now have access to a new pool of money.
The Canada Infrastructure Bank (CIB) has provided the First Nations Bank of Canada (FNBC) with $100 million to offer as capital for smaller infrastructure projects. FNBC will be matching that amount.
The money will be loaned to First Nations Bank’s clients at a low interest rate as it blends FNBC’s competitive market rate with CIB’s low-cost financing.
The partnership, says CIB CEO Ehren Cory, allows CIB to be involved in projects that aren’t the bank’s usual billion-dollar infrastructure dealings.
“FNBC has reached to communities big and small, First Nations communities, Mtis and Inuit communities across the country in a way that we don't,” said Cory. “They have unique capabilities in being able to serve (Indigenous communities). And we have a mandate around building infrastructure across Canada and our typical projects are quite big and it's hard for us to have that national reach.”
The genesis of CIB’s partnership with FNBC began last summer when the two banks provided funding for different aspects of the same development project for an urban reserve in Saskatoon.
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“(We were) looking at how many more clients FNBC has and their relationships with communities where there's a number of similar deals either on the reserve or in a hamlet or even on other Indigenous-owned lands that are needing to be developed,” said Hillary Thatcher (Mtis), CIB’s managing director of investments. “And we thought this would make for an innovative partnership to move forward.”
It was a concept that FNBC’s new president and CEO Bill Lomax of Gitxsan Nation could get onboard with.
“This is just a really exciting time for Indigenous communities right now. The financial picture for them has changed pretty dramatically over the last few years,” said Lomax.
“With the new funding that's coming in and the new settlements that are happening, all of these things are going to create even more demand and need for these projects to get up and running in the near future, and having this loan program, our partnership with CIB, will allow us to get that money out to communities to do the projects all that much faster,” he said.
FNBC will be loaning CIB’s $100 million in varying amounts to meet the needs of qualifying projects. CIB’s funding will cover the infrastructure costs, such as site works, roadworks, water and wastewater management and utility connections. FNBC will match that amount to cover other costs of the project. FNBC will also do the underwriting of the project and risk management of it on an ongoing basis.
Both FNBC and CIB would have “skin in the game,” said Lomax.
And for the developer, it’s an easier process.
“Now we can create one product where the community can get all of their financing in one place instead of having to deal with two different institutions with two different sets of terms,” said Thatcher.
While the program was only announced Wednesday, Lomax says he’s been hinting with clients that something was to come and added there are a number of projects “in the wings” that he feels are a good fit.
As for the benefits to Indigenous communities, Lomax is confident the program will lead to a better quality of life.
“If we can help a community get off of diesel, if we can help them build a community centre or housing project, these have very direct on-the-ground impacts for the communities that we serve,” he said.
Cory adds that he anticipates that with First Nations Bank’s reach into communities that CIB currently has no dealings, CIB will be getting referrals for larger projects that fit its mandate.
“I think it's also going to help us just spread the word, raise awareness and have more communities know more about us,” he said.
Last month, CIB provided its first loan under its new Indigenous Equity Initiative with $18 million to Wskijinu'k Mtmo'taqnuow Agency (WMA), an economic limited partnership owned by 13 Mi’kmaw communities in Nova Scotia as part of an energy storage facilities project. See our story here: https://windspeaker.com/news/windspeaker-news/first-indigenous-equity-loan-canada-infrastructure-bank-supports-mikmaw
Funding from CIB covered 90 per cent of the WMA’s financing for the project. Through this initiative, CIB collects 75 per cent of the proceeds to service the WMA’s debt, while the remaining 25 per cent goes to the nations as an early return.
Windspeaker.com