Financing First Nation Clean Energy Projects

Report
Financing First Nation
Clean Energy Projects
The Vancity Story
Vancity was founded in 1946 to provide financial services to
people from all walks of life.
Through strong financial performance, we serve as a catalyst
for the self-reliance and economic well-being of our
membership and community.
We are committed to delivering real solutions to help our
members and communities achieve their financial goals.
Who we are today
Vancity has grown to become the largest credit union in Englishspeaking Canada, with more than $17 billion in assets.
Vancity serves over 475,000 members through 59 branches
located throughout the traditional territories of the Coast Salish
People – in Metro Vancouver, the Fraser Valley, Squamish and
Victoria.
The Vancity Group is committed to a new definition of wealth,
where the well being of people and communities is more than
simply financial, and by working together we can all thrive and
prosper.
Strategic Focus Areas
•
Protecting the Environment
•
•
Helping People Build Assets
•
•
By reducing our impact and promoting solutions to climate
change
By improving access to financial services and affordable
home ownership
Strengthening Communities
•
By strengthening non-profits, social enterprises and
investing in targeted communities
Building relationships…
Vancity Relationship Positioning
Community
planning
activities
including
establishing
community
priorities
Development
of financial
options to
realize
community
priorities
Positioned to
be “top of
mind” to
provide
financial
product and
services
solutions
Traditional
Relationship
Positioning
Monitor and
support
relationship
and
participate in
ongoing
community
planning
Our track record
Willing to work on the ground throughout BC
• Project finance team has funded $150M in loans
funded in last 5 years including 5 power deals
• Ability to fund power projects up to $35 million in
total cost. Provided debt for:
•
China Creek Hydro
Hupacasath FN Project
Canoe Creek Hydro
Tla-o-qui-aht FN
Project
Hupacasath First Nation Upnit Power: China Cre
January 2006 -Grand Opening with Chief Judith Sayers
China Creek Project
Concrete weir/intake pipe – limited
environmental impact
Twin generators provide redundancy
Penstock installation followed by full land
“rehab”
Tail Race returning water flow to river
China Creek – Lessons Learned
•
•
•
•
Outstanding management – Chief Judith Sayers/CEO
Trevor Jones were involved day-by-day.
Hupacasath First Nation received critical early funding
(Green Municipal Fund, WD, INAC) to complete
environmental, hydrology and engineering studies.
Conservative capital structure – 70% senior bank
debt/30% equity provided safety “margin” when one
generator unexpectedly broke down.
Ownership structure – first nations, engineering firm, city
– created “partnership” to overcome potential issues and
roadblocks.
Tla-o-qui-aht and Barkley Group
Canoe Creek Project
Intake structure
Looking down the steep section – 60% grade
Powerhouse
and genset
High pressure penstock
Canoe Creek – Lessons Learned
•
•
•
•
•
Iain Cuthbert, John Ebell and TFN have built a strong
Partnership:
• Trust and respect: Shared values on environmental
stewardship and business ethic
• Collaboration – each brought unique skills and strengths
Excellent project management
Working with experienced partners: e.g. Hazelwood, Canyon,
Vancity/CWB
Creative funding sources e.g. Federal stimulus money
More projects down the road together…
Standard Terms and Conditions
Loan to Project Cost
Amortization
Term
Interest –
construction
Interest during term
Security
Guarantees
Senior Debt
Subordinated Debt
75% to 80% with cap
90% to 100%
Match EPA or SOP term
Same
Construction period plus 5 years
Same
Prime + 1.25% to 3%
Prime + 4% and up
Prime + 1.25% to 3% or equiv fixed
rate
Prime + 4% and up (or equiv fixed
rate)
1st charge over Project assets
2nd charge over Project assets
Full Guarantees
Full Guarantees
Terms and Conditions, continued
Senior Debt
Subordinated Debt
Covenants
Debt Service Ratio> 1.3x all debt
Debt Service Ratio > 1.3x all debt
Advances
After equity and sub-debt, based
on Independent Engineer
certified costs incurred
Advanced behind equity but
ahead of senior debt, based on
IE certified costs incurred
Repayment
Interest only during construction,
blended during term
Same
Prepayment
Floating 3 mths penalty
(Fixed rate full penalty)
6-12 months penalty
3-6 months principal and interest
3-6 months principal and
interest
Hydrology reserve account
Terms and Conditions, continued
Bonding
Insurance
Fees
Legal costs
Independent Engineer (IE)
Working capital and GST
Financial reporting
Senior Debt
Subordinated Debt
Material contracts
Same
Reviewed for adequateness
Same
Application Fee: 0.5%
Commitment fee: 1.0%
Application Fee: 1%
Commitment fee: 2%
Under $50k
Use same lawyer
Monitor project, certify costs
(IE costs passed on to
Borrower)
Use the same IE to minimize
costs
Can be funded
Can be funded
Annual Review, IE Report, Qtrly
financials
Same
What does it take to get financing?
•
•
•
•
•
•
Experienced development team
First Nation approval, tangible involvement
and/or equity participation
All permitting, licenses, plans in place
Electricity purchase agreement with BC Hydro
Environmental approvals
Strong site characteristics: hydrology, geology,
interconnection, minimum environmental impact
Vancity contacts
Stewart Anderson, Manager, Aboriginal Banking
604.787.1988, [email protected]
John Kirincic, Investment Manager, Community Capital
604.709.6950, [email protected]
Andy Broderick, Vice President, Community Investment
604.877.4559, [email protected]
To learn more about our work with Aboriginal Not for Profit
and First Nation government organizations visit
www.vancity.com/aboriginalcommunities
Financing First Nation
Clean Energy Projects

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