Aboriginal investment in run-of-river power projects

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 defaults

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 sold at $63/MWh ▸ Annual loss $20MM

Taku River Tlingit

▸  2MW run of the river power plant

▸  100% owned by Taku River Tlingit

▸  Ecotrust Canada Capital financed 20% of $5MM equity

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 ▸  2010(?) 5,000 GWh/yr call

Total number of projects: 100-200

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 syndicate

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”.

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 ownership

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

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% 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

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