Canada to give Indigenous groups loan guarantees for resource projects
The last section of pipeline is assembled on the Trans Mountain pipeline expansion project before operations are expected to begin in the second quarter of 2024, near Laidlaw, British Columbia, Canada, February 18, 2024.
OTTAWA (Reuters) - Canada will provide up to C$5 billion ($3.6 billion) in loan guarantees to help Indigenous groups invest in natural resource projects, the Liberal government said in its annual budget on Tuesday.
The program could give the groups major investment opportunities, from the government-owned Trans Mountain oil pipeline to TC Energy's Coastal GasLink pipeline, power lines and wind and solar projects.
"That's going to be an absolute game-changer for Indigenous companies and communities that are trying to get involved in the renewable electricity sector," said Fernando Melo, federal director of the Canadian Renewable Energy Association. "It's a great start."
The Liberal government, which came to power in late 2015, has invested billions of dollars to improve the living conditions of Canada's First Nations, who have higher levels of poverty and lower life expectancy than other Canadians.
A federal loan guarantee would allow First Nations to borrow at favorable rates, enabling them to reap larger profits.
The loan guarantee program is sector-agnostic, indicating that it will be available for all forms of resource projects, including those involving oil and gas, said Niilo Edwards, CEO of First Nations Major Projects Coalition, an Indigenous-owned organization that advises First Nations on project investments.
"Not all nations have the same sector opportunity, so that kind of approach is a sign of fairness," Edwards said.
For energy companies, Indigenous partnerships provide capital infusions and a way to speed projects through approval from provincial governments that in some cases require First Nations investment.
Details have not yet been published on how soon the loan guarantees will be available.
($1 = 1.3823 Canadian dollars)