Written by Sharon Singh, Kenryo Mizutani, Radha Curpen, Jason Roth, Will Osler and Thomas McInerney
On March 19, 2021, the Canada Infrastructure Bank (CIB) launched the Indigenous Community Infrastructure Initiative (ICII), which aims to invest $1 billion to encourage infrastructure investment in Indigenous communities. The initiative plans include channeling more investments into Indigenous communities to support their economic growth and address the existing infrastructure gap.
The IICI is part of the $10-billion Growth Plan to attract investment into Canada's infrastructure in certain priority areas for the CIB, with the aim of transforming public infrastructure, creating jobs, and transitioning to net-zero emissions by 2050 (see The Government of Canada Announces $10-Billion Infrastructure Growth Plan for our commentary).
Project Eligibility
The ICII will provide low-interest long-term financing of at least $5 million for up to 80 percent of total project costs. Projects relating to the five CIB priority areas of public transit, green infrastructure, trade and transport, broadband and clean power are eligible.
Through the ICII, the CIB aims to develop revenue-generating projects in partnership with Indigenous communities as well as with private and institutional investors to support local economic development and create jobs that will result in a reduction in the current infrastructure gap.
To be eligible for financing by the CIB, a project must be community-based and improve the Indigenous community to reduce the infrastructure gap. The eligibility requirements are as follows:
- revenue generation (partial revenue support from other community revenues is allowed);
- an investment of at least 20 percent from the Indigenous community or another industry sponsor;
- an investment of at least $5 million from the CIB and up to 80 percent of the total project cost financed by the CIB;
- a robust construction and operations risk mitigation strategy for the project;
- represent new or significant improvement from the existing infrastructure; and
- address one of the five priority areas of the CIB (public transit, green infrastructure, trade and transport, broadband, and clean power) and qualify as one of the eligible project categories.
The CIB will follow a structured application process to assess applications.
Eligible Project Categories
For each of the five priority areas of the CIB, there are various eligible project categories to receive financing from the CIB.
Clean Power
- renewable energy-powered micro-grids;
- renewable energy projects such as solar, wind, small-scale hydro, tidal, biomass, and geothermal;
- district energy systems; and
- transmission installation and upgrades for electricity access improvement and reliability.
Green Infrastructure
- transition from diesel to energy sources with lower carbon intensity or renewable energy;
- retrofitting of buildings for energy efficiency;
- access to clean drinking water; and
- water and wastewater management systems with improved environmental performance.
Trade & Transport and Public Transit
- transportation for remote or rural communities (roads, bridges, rail, airports, regional bus systems); and
- irrigation for agricultural communities.
Broadband
- communication infrastructure for remote or rural communities, including broadband internet.
Key Takeaway
There is growing momentum to accelerate, in partnership with Indigenous communities, infrastructure development in Canada's critical infrastructure such as clean energy, connectivity and transportation. The ICII will help address some of the barriers faced by Indigenous communities in accessing capital to develop Indigenous-owned and -led infrastructure projects. The ICII's non-traditional approach to community revenue generation is a significant departure from the CIB's traditional approach, demonstrating flexibility and recognition of the larger public policy objective of economic reconciliation.
If you have any questions regarding the Indigenous Community Infrastructure Initiative (ICII), please do not hesitate to contact a member of the Bennett Jones Capital Projects, Aboriginal Law or Power & Renewables groups.
Bennett Jones