Overview of the Aboriginal Loan Guarantee Program (ALGP)
The $650 million
Aboriginal Loan Guarantee Program
supports Aboriginal participation in renewable green energy infrastructure in Ontario including transmission projects and wind,
solar and hydroelectric generation projects.
The program was announced in the
2009 Ontario budget
and provides a Provincial guarantee for a loan to an Aboriginal corporation to purchase up to 75 per cent of an Aboriginal
corporation's equity in an eligible project, to a maximum of $50 million.
- The program is available to corporations that are wholly-owned by Aboriginal communities.
By participating in eligible renewable energy projects, First Nation and Métis communities can benefit from jobs and training
as projects are developed and from dividends once projects come into service.
Loan guarantees are provided under the program no earlier than at the point of financial close for the project, after
regulatory approvals are in place and at the same time, or after, all other financing is put in place.
- The Ontario Financing Authority (OFA) administers the program on behalf of the Province.
- The ALGP requires a sufficient level of due diligence in order to satisfy eligibility criteria and to draft the
required underlying legal agreements. The applicant is required to obtain financial and legal advice, and may incur
costs passed on from the lender. The OFA and the Province will not be responsible for any costs and/or expenses
incurred by the applicant related to the ALGP application and review process, and the applicant will not be able to
recover any such costs or expenses from the ALGP. As the scale of these costs is similar, regardless of the size of
the application, a small application may not be cost-efficient. The ALGP is better suited for applications greater
than $5 million.
The Aboriginal Loan Guarantee Program is a discretionary, non-entitlement program. Any decision to provide a loan guarantee
will be at the sole and absolute option of the Province. This means that even if an application meets the program objectives
and criteria, the Province is under no obligation to provide a guarantee. Assistance in the form of loan guarantees is limited.