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.

2. Financing First Nation
Participation in
Renewable Energy

3. Ecotrust Canada
▸ Building the conservation economy
▸ Capacity, connections, capital
▸ Forestry, fisheries, energy

4. Ecotrust Canada Capital

5. Ecotrust Canada Capital
▸ Wholly owned subsidiary
▸ $10MM in loans
▸ 40% to First Nation owned ventures
zero defaults

6. First Nation Opportunities
1. Remote Community Electrification
2. IPP wave

7. First Nation Opportunities:
1. Building and owning off-grid power
station
Example: Taku River Tlingit

8. Taku River Tlingit

9. 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

10. Taku River Tlingit
▸ 2MW run of the river power plant
▸ 100% owned by Taku River Tlingit
▸ Ecotrust Canada Capital financed 20%
of $5MM equity

11. Taku River Tlingit
“When we turn on the lights or turn up
the heat, we’re paying ourselves”

12. 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

13. First Nation Opportunities
2. Building and owning an on-grid power
station
Example: Hupacasaht First Nation

14. Hupacasaht First Nation

15. Hupacasaht First Nation
▸ 6.5 MW plant
▸ Hupacasaht own 72.5%
▸ Ecotrust Canada Capital participated in
$9MM debt syndicate

16. 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”.

17. First Nation Opportunities
3. Negotiating a stake in an independent
power project

18. Accommodation
▸ Free-carry
▸ Royalty
▸ Option to acquire stake
▸ Conversion of royalty to ownership
▸ Post EPA ownership

19. 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

20. First Nation Opportunities
3. Negotiating a stake in an independent
power project
Example: Y First Nation

21. 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

22. Regeneration Fund
▸ Typical project:
▸ 10 MW
▸ $2MM equity financed (33% ownership)
▸ $15MM net cash over 30 years