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Review Process
Applications for support under the Aboriginal Loan Guarantee Program will undergo a review to assess the financial viability of the projects. The program review process is comprised of three steps.
The ALGP application review and approval process will consist of:
- Initial Review:
The OFA assesses whether the application is complete and meets the basic program criteria (e.g., the applicant is a wholly-owned corporation, project has a Power Purchase Agreement, etc.). - Due diligence assessment:
The OFA, in conjunction with its third-party due diligence service provider, evaluates project risk to determine whether the provision of a loan guarantee is appropriate through: - an analysis and verification of the applicant’s financial status as well as the financial status of any project partners;
- an assessment of the cash flows associated with the proposed project;
- an evaluation of the various project risks (approvals, construction, operation), and any associated risk mitigation measures (e.g., reserve accounts, insurance, etc.);
- stress testing projected cash flows based on identified risks;
- an assessment of the loan repayment ability;
- an assessment/valuation of any asset, including any shares, that may be pledged as security for the loan guarantee; and
- an identification of risks to assist the OFA to make informed decisions, mitigate default risk and reduce the possibility of loss or fraud.
- Decision on support:
If an application passes the due diligence process, the OFA will seek Minister of Finance / Cabinet approval to provide the loan guarantee and negotiate the final terms of the loan guarantee agreement with the applicant and their financial institution.
For additional details, please contact algp@ofina.on.ca or Sandy Roberts, Director of the Strategic Project Finance Branch, at 416-325-1557.
