Over $5 billion to boost the involvement of Indigenous communities in major wind power projects

Hydro-Québec is pleased to announce, thanks to the involvement of the Canada Infrastructure Bank (CIB) and National Bank of Canada, the launch of a flexible financing program worth over $5 billion, intended for major wind energy projects carried out in partnership with Indigenous communities, to support their participation in these large-scale projects.

The program is intended for Indigenous communities that have entered into a partnership agreement with Hydro-Québec as part of its Wind Power Development Strategy, for projects with a capacity of up to over 1,000 MW and scheduled for completion no later than December 31, 2036. This is a first milestone that will enable Indigenous communities to become investment partners in new energy infrastructure projects and generate recurring autonomous streams of income that can be allocated to priorities of their choosing. By removing a significant barrier to participation, the program helps foster a new model of energy development based on sustainable economic partnerships with First Nations and Inuit.

The financing package of more than $5 billion, made available to the communities through a joint offering by the Canada Infrastructure Bank and National Bank, is divided between construction loans and equity loans, with the latter totalling up to $1.3 billion.

• The investment by the Canada Infrastructure Bank will be made through two financial instruments:
  • The construction loan, which can cover up to 20% of project costs and is repaid primarily through federal tax credits.
  • The IEI loan (Indigenous Equity Initiative), which can cover up to 90% of the required equity contribution, with a $100-million cap per project.
• National Bank of Canada, for its part, will offer a financing program that covers that remaining 10% to provide up to 100% of the equity financing.

These flexible solutions can be used in combination or independently, with no obligation to participate. As the program’s initiator, Hydro-Québec will work with the communities and, if they so desire, assist them in their dealings with financial institutions.

Quotes

“With this financing program, Hydro-Québec aims to make it easier for Indigenous communities to access financial tools tailored to their needs. During the consultations held as part of the implementation of the Strategy for Economic Reconciliation and to Strengthen Relations with First Nations and Inuit, Indigenous communities clearly expressed their desire to play a greater role in Québec’s major energy projects. This program directly addresses that request and clearly demonstrates our commitment to giving everyone who wishes to contribute with us to Québec’s energy development the opportunity to do so. We are proud to have brought together major partners to develop this solution.”

Claudine Bouchard
President and Chief Executive Officer of Hydro-Québec

“Hydro-Québec’s program reflects the CIB’s strategy to mobilize flexible, long-term capital to promote Indigenous participation in major infrastructure projects. By tailoring financing structures to the revenue generated by the projects, Indigenous communities can participate as financial partners while contributing to the rapid implementation of large-scale renewable energy projects that strengthen the province’s energy system.”

Ehren Cory
Chief Executive Officer, Canada Infrastructure Bank

“National Bank is proud to help advance major wind energy projects alongside Hydro-Québec and the CIB. This innovative program reflects our commitment to supporting Indigenous communities as they participate in large-scale projects and allows National Bank to support the expansion of Hydro-Québec’s electricity generation through renewable energy sources, which is essential to ensuring Québec’s energy security.”

Laurent Ferreira
President and Chief Executive Officer, National Bank of Canada