Indigenous loan guarantees for equity in major projects
Federal and provincial guarantees now help Indigenous Nations borrow to buy ownership stakes in major projects. They lower the cost of the loan. They do not replace the work of judging the investment.
Photo by Peter Robbins on Unsplash
Ownership stakes in major projects, from transmission lines to power plants, are increasingly part of the discussion between project proponents and First Nations, Métis and Inuit communities. A common obstacle is capital. An equity stake in a large project can cost hundreds of millions of dollars, and few communities can fund that from their own resources.
Indigenous loan guarantees exist to close that gap. Two programs matter most to Nations and development corporations in British Columbia: the federal Indigenous Loan Guarantee Program and the Province’s First Nations Equity Financing Program.
Why equity stakes need help with financing
Buying into a project usually means borrowing against the future income from that stake. Lenders price that loan on risk. The Province of British Columbia names the barriers plainly: its program is intended to address limited credit history, insufficient collateral and high borrowing costs. When the federal program was launched, its announcement linked these challenges to the Indian Act and the legacy of colonialism.
The result, without support, is a loan that costs more or is not offered at all. Either can make a sound investment unworkable.
How an Indigenous loan guarantee works
The Province describes a loan guarantee as not a loan or a grant, but a financial backstop that enables applicants to secure commercial financing. The borrower signs a loan agreement with a lender, and the guarantor supports that agreement. The guarantor is only involved if the borrower defaults.
Because a government guarantor stands behind the loan, the lender’s risk falls, and so does the price of the loan. The Department of Finance says the federal program supports Indigenous groups in obtaining more favourable borrowing rates, making it more affordable for most communities to take a greater share in the benefits of major projects.
The federal Indigenous Loan Guarantee Program
The federal program was launched on 17 December 2024 with up to $5 billion in loan guarantees for natural resource and energy projects. It is run by the Canada Indigenous Loan Guarantee Corporation (CILGC). Budget 2025 confirmed that the government had doubled it to $10 billion, and announced that CILGC would work with Indigenous investors on greenfield, or new-build, projects.
The program’s eligibility rules are specific:
- Guarantees range from $20 million to $1 billion per transaction.
- Only Indigenous groups, or their wholly owned subsidiaries, may apply.
- In a consortium, Indigenous groups that meet the program’s criteria must contribute at least 25% of the value of the investment.
- An application needs a clear statement of support from the group’s leadership, such as a band council resolution.
- The investment must be in a major project: a large or capital-intensive asset that earns its revenue mainly from operating, leasing or commercial use. Gaming and casino projects are not eligible.
The process runs from an expression of interest through eligibility assessment, due diligence, a term sheet, approval, community approvals and documentation, and then ongoing monitoring.
The scale is now visible. In June 2026, the federal government announced a guarantee supporting about $715 million in financing for seven Williams Treaties First Nations in Ontario to acquire a significant minority stake in the Darlington New Nuclear Project. It described it as the largest Indigenous loan guarantee ever issued in Canada.
A guarantee lowers the cost of the loan. It does not change the economics of the project.
BC’s First Nations Equity Financing Program
British Columbia opened its own program to applications on 16 June 2026. It has a total cap of $1 billion and supports First Nations in obtaining equity loans for new investments or significant expansions of existing projects within their territories.
Its terms differ from the federal program in useful ways:
- Guarantees may cover up to 20% of a project’s total capital cost, from a minimum of $5 million to a maximum of $400 million.
- There are two project categories: small and medium projects of $25 million to $125 million in capital costs, and large projects above $125 million.
- Eligible sectors include natural resources, energy, tourism, agriculture and aquaculture, among others.
- The program page lists eligible applicants as BC-based Indigenous governing bodies, such as band councils and modern Treaty Nations, and First Nations development corporations and other entities they own and control, with proof of support.
The Province accepts proposals on a continuous basis until the available guarantee room is fully allocated, and it applies due diligence similar to what a commercial lender would expect.
What lenders and guarantors will still test
A guarantee changes who carries the risk of default. It does not change whether the project will earn what its sponsors say. The questions a Nation’s council and its advisers should ask are the same questions a lender will ask.
Will the distributions cover the debt? Model the cash the stake is expected to pay out each year against the loan payments, in a slow year as well as a good one.
What does the community own? Understand the rights attached to the shares: board seats, information rights, restrictions on sale, and what happens if the project needs more capital.
What could go wrong? Construction delays, cost overruns, commodity prices and regulatory change all affect distributions. Find out who bears each risk under the project agreements.
Who is advising whom? A project proponent’s financial model is written to sell the deal. The Nation needs independent financial, legal and tax advice of its own.
A practical next step
If an equity offer is in front of your council or development corporation, start with an independent review of the project’s financial model and the cash it will actually distribute. Then check each program’s eligibility rules against the deal structure before you approach a lender.
Our Funding & Grants practice prepares feasibility work, financial models and guarantee applications to the standard lenders and councils need. Firms partnering with Nations on public work may also find our note on Indigenous participation in public bids useful.
Sources
- “Launching First Nations Equity Financing Program”, BC Gov News, Ministry of Finance, 16 June 2026. https://news.gov.bc.ca/releases/2026FIN0023-000703
- “Government announces largest Indigenous loan guarantee in Canadian history to support Darlington New Nuclear Project”, Department of Finance Canada, 23 June 2026. https://www.canada.ca/en/department-finance/news/2026/06/government-announces-largest-indigenous-loan-guarantee-in-canadian-history-to-support-darlington-new-nuclear-project.html
- “Indigenous Loan Guarantee Program”, Canada Development Investment Corporation, 17 December 2024. https://cdev.gc.ca/indigenous-loan-guarantee-program/
- “Budget 2025, Chapter 1: Building a stronger Canadian economy”, Government of Canada. https://budget.canada.ca/2025/report-rapport/chap1-en.html
- “Program”, Canada Indigenous Loan Guarantee Corporation. https://cilgc-cgpac.ca/en/program
- “First Nations Equity Financing Program”, Province of British Columbia. https://www2.gov.bc.ca/gov/content/employment-business/economic-development/indigenous-economic-development-resources/first-nations-equity-financing-program
