Financing First Nation
   Participation in
  Renewable Energy
Ecotrust Canada
▸  Building the conservation economy

▸  Capacity, connections, capital

▸  Forestry, fisheries, energy
Ecotrust Canada Capital
Ecotrust Canada Capital
▸  Wholly owned subsidiary

▸  $10MM in loans

▸  40% to First Nation owned ventures
      zero de...
First Nation Opportunities
1.  Remote Community Electrification
2.  IPP wave
First Nation Opportunities:

1.  Building and owning off-grid power
    station

      Example: Taku River Tlingit
Taku River Tlingit
Taku River Tlingit
▸  1.3MM litres of diesel burnt annually
▸  Cost of diesel fuel to BC Hydro $200/
   MWh
▸  Electricity...
Taku River Tlingit
▸  2MW run of the river power plant

▸  100% owned by Taku River Tlingit

▸  Ecotrust Canada Capital fin...
Taku River Tlingit
“When we turn on the lights or turn up
 the heat, we’re paying ourselves”
e IPP wave in BC
▸  2008      5,000 GWh/yr call
▸  2008      10 MW standing offer program
▸  2008      Bio-energy call
▸  2...
First Nation Opportunities
2. Building and owning an on-grid power
  station

   Example: Hupacasaht First Nation
Hupacasaht First Nation
Hupacasaht First Nation
▸  6.5 MW plant

▸  Hupacasaht own 72.5%

▸  Ecotrust Canada Capital participated in
   $9MM debt ...
Hupacasaht First Nation
•  “When the debt is paid off, annual
   dividends from this project will exceed
   our payments fr...
First Nation Opportunities
3. Negotiating a stake in an independent
  power project
Accommodation
▸  Free-carry
▸  Royalty
▸  Option to acquire stake
▸  Conversion of royalty to ownership
▸  Post EPA owners...
X First Nation
▸  <10MW Project
▸  Negotiated accommodation:
  ▸  1% Royalty
  ▸  8% Equity given after 20 years
▸  10% eq...
First Nation Opportunities
3. Negotiating a stake in an independent
  power project

        Example: Y First Nation
Y First Nation
▸  ~10MW Project
▸  Negotiated accommodation
  ▸  30% common shares
  ▸  2% preferred shares
▸  8% preferre...
Regeneration Fund
▸  Typical project:
  ▸  10 MW
  ▸  $2MM equity financed (33% ownership)
  ▸  $15MM net cash over 30 years
Aboriginal investment in run-of-river power projects
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Aboriginal investment in run-of-river power projects

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First Nations are in a strong position to negotiate equity investments in run-of-river power projects in their traditional territories, says consultant Pieter van Gils.

Van Gils, the former Managing Director of Ecotrust Canada Capital and now a consultant, gave a presentation to a forum hosted by the Aboriginal Business Services Network on Nov. 27 in Vancouver about Aboriginal investment opportunities in micro-hydro power projects in BC.

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Aboriginal investment in run-of-river power projects

  1. 1. Financing First Nation Participation in Renewable Energy
  2. 2. Ecotrust Canada ▸  Building the conservation economy ▸  Capacity, connections, capital ▸  Forestry, fisheries, energy
  3. 3. Ecotrust Canada Capital
  4. 4. Ecotrust Canada Capital ▸  Wholly owned subsidiary ▸  $10MM in loans ▸  40% to First Nation owned ventures zero defaults
  5. 5. First Nation Opportunities 1.  Remote Community Electrification 2.  IPP wave
  6. 6. First Nation Opportunities: 1.  Building and owning off-grid power station Example: Taku River Tlingit
  7. 7. Taku River Tlingit
  8. 8. Taku River Tlingit ▸  1.3MM litres of diesel burnt annually ▸  Cost of diesel fuel to BC Hydro $200/ MWh ▸  Electricity sold at $63/MWh ▸  Annual loss $20MM
  9. 9. Taku River Tlingit ▸  2MW run of the river power plant ▸  100% owned by Taku River Tlingit ▸  Ecotrust Canada Capital financed 20% of $5MM equity
  10. 10. Taku River Tlingit “When we turn on the lights or turn up the heat, we’re paying ourselves”
  11. 11. e IPP wave in BC ▸  2008 5,000 GWh/yr call ▸  2008 10 MW standing offer program ▸  2008 Bio-energy call ▸  2010(?) 5,000 GWh/yr call Total number of projects: 100-200
  12. 12. First Nation Opportunities 2. Building and owning an on-grid power station Example: Hupacasaht First Nation
  13. 13. Hupacasaht First Nation
  14. 14. Hupacasaht First Nation ▸  6.5 MW plant ▸  Hupacasaht own 72.5% ▸  Ecotrust Canada Capital participated in $9MM debt syndicate
  15. 15. Hupacasaht First Nation •  “When the debt is paid off, annual dividends from this project will exceed our payments from INAC for all our social programs”.
  16. 16. First Nation Opportunities 3. Negotiating a stake in an independent power project
  17. 17. Accommodation ▸  Free-carry ▸  Royalty ▸  Option to acquire stake ▸  Conversion of royalty to ownership ▸  Post EPA ownership
  18. 18. X First Nation ▸  <10MW Project ▸  Negotiated accommodation: ▸  1% Royalty ▸  8% Equity given after 20 years ▸  10% equity participation financed by Ecotrust Canada Capital ▸  $50,000/yr from yr 11, $200,000/yr from yr 20 or $1.7MM book value
  19. 19. First Nation Opportunities 3. Negotiating a stake in an independent power project Example: Y First Nation
  20. 20. Y First Nation ▸  ~10MW Project ▸  Negotiated accommodation ▸  30% common shares ▸  2% preferred shares ▸  8% preferred share participation financed by Ecotrust Canada Capital ▸  $75,000/yr in yrs 1-10, $125,000/yr in yrs 11-20, $1MM/yr in yrs 20-40
  21. 21. Regeneration Fund ▸  Typical project: ▸  10 MW ▸  $2MM equity financed (33% ownership) ▸  $15MM net cash over 30 years

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