Coastal GasLink Equity Transaction

The First Nations Major Projects Coalition (FNMPC) involvement in the Coastal Gas Link Equity Transaction (CGL) represents the most complex and intensive capacity development undertaking by the FNMPC to date.

In the spring of 2019, TC Energy announced that it would sell up to 75% of the CGL project and that the sale would be conducted in two parts: 1) a commercial auction, and 2) a First Nation Set-Aside where the First Nations impacted by the project’s routing would be eligible to purchase equity in the project on commercial terms.

In May 2019, FNMPC members requested capacity support to participate in both the commercial process and the set-aside process. Within one moth of receiving the mandate, FNMPC assisted 12 First Nations in establishing a Limited Partnership under which they have participated in both sale processes, referred to as CGL First Nation Limited Partnership (FNLP).

While FNLP made it to the final round of bidding during the commercial process, a competitive cost of capital necessary to complete the purchase of the equity could not be sourced, and FNLP was forced to leave the process. While disappointing, this result has provided FNMPC with a real time example of the challenges First Nations face in raising financing in the capital markets for equity investment in major projects. FNMPC has used this experience to further its work in assisting First Nations in breaking down these barriers for future major project opportunities.

Currently, FNMPC continues to provide advice and support to FNLP for their participation in the First Nations set-aside component of the equity transaction.

FNMPC has assisted FNLP First Nations in designing the project governance in a manner that has put community leadership in direct control of the day-to-day decision-making through a management committee. This was specifically designed to help FNLP communities build business capacity.

FNMPC’s support in the CGL Equity Transaction demonstrates the organization’s abilities to support its members with capacity and coordination services on large, complex, and commercially competitive transactions.