Summary

• Applications are now open for the First Nations Equity Financing Program
• Rigorous eligibility and due diligence requirements support long-term project sustainability
• An equity loan guarantee is not a loan or grant, but a financial backstop enabling applicants to secure commercial financing

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The Province is opening applications for the First Nations Equity Financing Program, which will provide loan guarantees to help First Nations secure commercial financing to acquire equity in revenue-generating projects within their territories.

The program is designed to support economic participation, strengthen partnerships and contribute to economic growth and job creation throughout the province.

Program overview

The First Nations Equity Financing Program will provide loan guarantees to eligible applicants, with a total program cap of $1 billion. These guarantees will support First Nations in obtaining equity loans for new investments or significant expansions of existing projects within their territories.

The program is intended to address common barriers to capital access, including limited credit history, insufficient collateral and high borrowing costs. As part of the Province’s Look West strategy to reduce barriers and bring investment certainty to B.C., the program aims to facilitate First Nations participation in economic development opportunities and encourage collaboration with private-sector partners.

There are two project categories:

• Small and medium-sized projects: $25 million to $125 million in capital costs
• Large projects: over $125 million in capital costs

Loan guarantees may cover as much as 20% of a project’s total capital cost. Loan guarantee amounts can range from a minimum of $5 million to a maximum of $400 million. Government has committed to provide opportunities for equity participation in small and medium-sized projects.

Eligibility and project requirements

Eligible applicants include:

• B.C.-based Indigenous governing bodies (e.g., band councils, modern Treaty Nations)
• B.C.-based First Nations development corporations with formal government support
• other B.C.-based incorporated entities owned and controlled by an Indigenous governing body with formal government support

Eligible projects must:

• be located within the applicant’s territory
• demonstrate strong projected financial performance
• include new capital construction or significant capital expansion
• contribute to economic growth, employment and revenue generation
• be structured as legally separate entities from existing assets
• show clear commercial viability with sufficient expected returns

Fiscal management and program sustainability

The Province has established rigorous eligibility and due-diligence requirements to support long-term sustainability. Applicants must demonstrate:

• the ability to secure an equity loan from a commercial lender
• capacity to repay the loan using project-generated revenue

Government will support program operations for the first three years. Over time, the program is expected to become self-sustaining through fees charged on executed loan guarantees.

These fees, both one-time and ongoing, will be comparable to similar programs in Canada. Revenue generated will be directed to a First Nations equity financing special account to fund future operations.

The program is led by the Ministry of Finance, in partnership with the Ministry of Jobs and Economic Growth for delivery.

Quick Facts:

• A provincial equity loan guarantee is not a loan or a grant, but a financial backstop that enables applicants to secure commercial financing.
• Under this model, the borrower enters into a loan agreement with a lender, while the guarantor supports the agreement on behalf of the borrower.
• The guarantor is only involved if the borrower defaults.
• Loan guarantees may be used across sectors, including natural resources, energy, tourism, agriculture, aquaculture and others.
• The First Nations Equity Financing Program is part of the Province’s Look West Strategy, which supports major projects, skills training and growth in key economic sectors.

Learn More:

• To read more about the First Nations Equity Financing Program and to apply, visit: https://www2.gov.bc.ca/gov/content/employment-business/economic-development/indigenous-economic-development-resources/first-nations-equity-financing-program
• Learn about the Province’s Look West strategy: https://www2.gov.bc.ca/gov/content/employment-business/look-west-strategy