Indigenous Ownership in Energy Infrastructure

December 23, 2019

Written By Will Osler and Luke Morrison

Setting a New Standard

Alberta PowerLine (APL) is a partnership between Canadian Utilities Limited (CU), an ATCO company, and Quanta Services. APL was selected in 2014 to design, build, own and operate the $1.6-billion Fort McMurray West 500-kV Transmission Project.

The 508-km transmission line is the longest of its kind in Canada and was energized in March 2019. It was financed through the largest P3 bond transaction in Canadian history and has been recognized for creating a new standard of excellence in P3 projects.

CU announced in June 2019 it was offering an opportunity for Indigenous communities along the transmission line route to purchase up to a 40% equity interest in APL out of CU’s ownership stake as part of the sale transaction process. Definitive agreements with the participating Indigenous communities were announced in September and the sale closed on December 18, 2019, with a consortium between TD Greystone Asset Management and IST3 Infrastruktur Global acquiring the balance of the APL ownership interest.

Why the Deal Works

The 40% Indigenous equity stake in APL is a success because of:

• Structure: The project was structured from the start to include an option for meaningful ownership by Indigenous communities.
• A flexible ownership mix: Indigenous communities could tailor their investment in APL to best suit their circumstances.
• The asset: The transmission line is a provincially-regulated asset with a 35-year contract with the Alberta Electric System Operator. It will provide its Indigenous owners with a stable source of income they can bank on for years to come. CU will remain as the operator of APL.

Bennett Jones on the Deal

Bennett Jones acted for CU on the sale of APL. This is one of the latest innovative financing models for a major energy and infrastructure project Bennett Jones has advised on.

The transaction showcases how Indigenous communities and industry can work together in major energy infrastructure projects in Canada.

If you would like to discuss Bennett Jones' expertise in Mergers & Acquisitions, Energy or Capital Projects, please contact Will Osler or Luke Morrison.

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