Run-of-river hydro

Aboriginal People in Canada Getting into Clean Energy Business

In this age where virtually every country is looking for cleaner sources of energy, run-of-river hydroelectric generating stations are becoming more-and-more common, if not yet run-of-the-mill.

There are good reasons for the growing popularity. First, like all hydroelectric generation, run-of-river doesn’t produce any greenhouse gases or other harmful emissions. Second, while a major hydro project can involve huge dams and flood large tracts of land, run-of-river generates power from the natural flow of the water, so the impact on the environment, including marine life, is minimal.

In Canada, they are discovering that run-of-river hydro projects can offer more than clean energy — they also have the potential to generate significant, long-term economic benefits for the country’s Aboriginal people.

As the push to develop more clean energy has increased, independent power producers are approaching individual First Nations in Canada on a regular basis with proposals for small hydro development — under Canadian law, most Aboriginal peoples have certain rights with regard to resource development on their traditional territories.

In most cases, the power producers, in exchange for permission to develop their run-of-river hydro project, offer a royalty agreement to the First Nation.

These agreements attracted the attention of Ian Gill, the president of Ecotrust Canada — a non-profit established to nurture the conservation economy in coastal British Columbia. Mr. Gill says he wondered why First Nations wouldn’t just buy an equity stake in the project, which would seem to offer a better return than a royalty arrangement. When he put the question, Mr. Gill says, “Typically, the response was, ‘yes, but we don’t have the money to do that.’”

Meanwhile, two Aboriginal corporations that provide business financing and support services to First Nations in British Columbia — the Tribal Resource Investment Corporation (TRICORP) and the Tale'awtxw Aboriginal Capital Corporation — were asking the same kind of questions. Before long, they had formed the Aboriginal Energy

Partnership (AEP), and created the First Nation Regeneration Fund specifically to provide financing to enable First Nations to purchase equity positions in power projects.

“Run-of-river hydro power generation is one area where First Nations clearly have a competitive advantage,” says Peter Lantin, TRICORP’s Chief Operating Officer. “Our traditional territories, especially on the coast, have an abundance of clean energy. In fact, the first project we are helping to finance is a two-megawatt run-of-river hydro project owned by the Taku River Tlingit First Nation near Atlin in northern British Columbia.”

With $2 million from each of the Aboriginal corporations, and a $3 million contribution from Canada’s Department of Indian and Northern Affairs, the First Nation Regeneration Fund now has a total endowment of $7 million. It’s administered by Ecotrust Canada Capital, a subsidiary of Ecotrust Canada.

Loans made available through the Regeneration Fund are repaid by the First Nation through dividends and royalties from the run-of-river power project and possibly other sources. Once the loan is repaid, the dividends and royalties become long-term discretionary income that can be used by First Nations for economic or social development.

“The Regeneration Fund is going to provide access to much needed capital for First Nations,” says Sandy Wong, General Manager of the Tale’awtxw Aboriginal Capital Corporation. “It will help First Nations finance equity in independent power projects in British Columbia, and grow Aboriginal ownership in this critical sector of our economy. At the same time, these green energy projects are a natural fit with the social and cultural principles we support.”

Chuck Strahl, Canada’s Minister of Indian Affairs, says his department’s $3 million contribution to the Aboriginal Energy Partnership is part of the federal government’s commitment to encouraging Aboriginal participation in resource and energy projects across Canada. Calling the AEP a “unique approach,” Mr. Strahl says it will “maximize the benefits of our investment in Aboriginal economic development by leveraging capital from the private sector and other partners."

For more information, please contact:

Ecotrust Canada
Eric Enno Tamm
Communications Manager
(604) 219-1472
http://www.ecotrust.ca

Tale’awtxw Aboriginal Capital Corporation
Sandy Wong
General Manager
(604) 926-5626
http://www.tacc.ca

Tribal Resources Investment Corporation
Peter Lantin
Chief Operating Officer
(250) 624-3535
http://www.tricorp.ca