The C$1.9 billion Wataynikaneyap transmission project is the first of its kind to be majority-owned by First Nations communities, the largest indigenous-led infrastructure project in Canada, and will be the most far-reaching First Nations grid connection in Ontario when it is completed.

The multi-layer debt financing for the 1,118 mile project was seamlessly synchronized. At the project level, a complex construction financing was arranged, comprising a C$1.34 billion loan from Ontario’s energy ministry and a C$680 million loan from a syndicate of five Canadian banks.

The First Nations limited partner holdco, meanwhile, obtained a C$220 million equity loan, guaranteed by the provincial government under the Aboriginal Loan Guarantee Program, from two life insurance companies.

The extensive commercial, regulatory and strategic issues surrounding the financing necessitated the collaboration of numerous Canadian law firms.

The project’s socio-economic value has been placed at C$900 million. It is targeted for completion by 2023, and will supply energy to over 14,000 First Nations people or residents across Northwestern Ontario, thereby eliminating the financially unsustainable and environmentally risky reliance on costly diesel generation. It will also create about 769 jobs during construction, along with many other new economic opportunities.

“Indigenous Peoples are very patient and resilient – they have been talking about energy for 28 years,” said Margaret Kenequanash, CEO of Wataynikaneyap Power, when the project issued notice to proceed. “Today we place our mark on history as we work towards a shared vision which will form the foundation for our future generations.”

Since financing closed, construction on the first of two phases has begun. The first structure was erected on July 10, 2020.

Wataynikaneyap Power is a licensed transmission company regulated by the Ontario Energy Board and majority-owned by 24 First Nations communities in Northwestern Ontario, in partnership with Fortis and other private investors. Fortis agreed to purchase its 49% stake in the project from Renewable Energy Systems Canada (RES) in 2016.

Sponsors: First Nations LP (24 First Nations), FortisOntario (Fortis)

Minority investor: Liberty Utilities (Algonquin Power)

Total value: C$1.9 billion

Closing date: October 29, 2019

Project debt: C$2.02 billion

LP equity loan: C$220 million

Lenders: Government of Ontario, RBC, CIBC, National Bank of Canada, Scotiabank, TD Bank

LP equity lenders: Manulife, Sunlife

Project counsel: Torys

Counsel to First Nations LP: Stikeman Elliott

Counsel to Fortis: Davies

Lenders’ counsel (banks): Osler Hoskin & Harcourt

Lenders’ counsel (equity loan): McCarthy Tétrault

Counsel to the Government of Ontario: Fasken

Counsel to Ministry of Finance: Blaney McMurtry

Counsel to the Government of Canada: McMillan

Counsel to Algonquin: Fogler

EPC: Valard Construction

Counsel to Valard: McLean & Armstrong

See all of the 2019/2020 awards

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