$5B financing program launched to boost indigenous participation in wind energy projects

Key Takeaways:

• Hydro-Québec, the Canada Infrastructure Bank, and National Bank of Canada launched a flexible financing program worth more than 5 billion dollars to help Indigenous communities become investment partners in major wind energy projects across Quebec.
• The program targets Indigenous communities with Hydro-Québec partnership agreements for large-scale projects that generate up to 1,000 megawatts or more and reach completion by December 31, 2036.
• The financing package covers 100 percent of required equity contributions by combining a Canada Infrastructure Bank loan for up to 90 percent and a National Bank loan for the remaining 10 percent, which eliminates major financial barriers and creates recurring income streams for the communities.

The Whole Story:

Hydro-Québec, the Canada Infrastructure Bank and National Bank of Canada have launched a flexible financing program worth more than $5 billion to enable Indigenous communities to become investment partners in major wind energy projects across the province.

The program targets Indigenous communities that have signed partnership agreements with Hydro-Québec under its Wind Power Development Strategy. Projects eligible for financing must have a capacity of up to 1,000 megawatts or more and be completed by Dec. 31, 2036.

The financing package combines construction loans and equity loans, with equity financing totalling up to $1.3 billion. The Canada Infrastructure Bank will provide two instruments: a construction loan covering up to 20 per cent of project costs, repaid primarily through federal tax credits, and an Indigenous Equity Initiative (IEI) loan covering up to 90 per cent of required equity contributions, capped at $100 million per project. National Bank of Canada will cover the remaining 10 per cent of equity financing needed to reach 100 per cent coverage.

For the construction sector and project developers, the program removes a significant financing barrier for Indigenous participation in large-scale renewable energy infrastructure, potentially accelerating project timelines and enabling communities to generate recurring autonomous income streams.

“With this financing program, Hydro-Québec aims to make it easier for Indigenous communities to access financial tools tailored to their needs,” Claudine Bouchard, president and chief executive officer of Hydro-Québec, said in a news release. “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.”

Ehren Cory, chief executive officer of the Canada Infrastructure Bank, said the program “reflects the CIB’s strategy to mobilize flexible, long-term capital to promote Indigenous participation in major infrastructure projects.”

National Bank said in a statement it is “proud to help advance major wind energy projects alongside Hydro-Québec and the CIB,” adding the program “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.”

Hydro-Québec will assist participating communities in their dealings with financial institutions if requested. Communities may use the financing solutions in combination or independently, with no obligation to participate.