Eligibility and Evaluation Criteria


In order to be eligible to apply for a loan guarantee under the ALGP, an applicant must be an entity that is wholly-owned by an Indigenous community and the applicant must use the loan proceeds to fund a portion (typically about 75 per cent) of its equity investment in a project.

In order to be eligible, projects are required to meet the criteria listed below. Note that this list is not exhaustive or binding on the OFA or the Province, and the evaluation of a particular application may include further or different analysis as the OFA and the Province deem appropriate in their sole discretion. The OFA administers the program on behalf of the Province.

  • Experienced proponents and project partners or contractors with track records in construction and operation.
  • An agreement in place to purchase energy or regulatory approvals for rate-regulated projects.
  • Financial plan submitted by the applicant that is satisfactory to the Province.

    During its review and evaluation of the financial plan, the Province will consider the following criteria:

    • The availability of sufficient cash to service the guaranteed loan and other obligations of the applicant under the proposed size and term of the loan.

      The Province will analyze the debt service coverage ratio, taking into account all obligations of the project and applicant, under a base case and various stress cases. The base case for the financial evaluation uses conservative assumptions. For example, in analyzing wind projects, the base case may consider resource availability at the P-90 level. The Province will also analyse stress cases based on the specifics of the project.
    • Reasonable and appropriate budgeted project costs (e.g., adequate contingency amounts have been included).
    • A reserve account that could be used by the applicant to make scheduled debt service payments in periods where project cash flow is insufficient to service the guaranteed loan, in an amount that is satisfactory to the Province.
    • Terms and conditions of other debt obligations satisfactory to the Province. It is generally expected that other debt obligations of the applicant will rank behind the guaranteed loan, in order of repayment and priority of security.
  • Loan agreement for the guaranteed loan with a lender financial institution satisfactory to the Province and ancillary documents, on terms and conditions that are satisfactory to the Province.

    During its review of the loan agreement, the Province will consider the following criteria:

    • Guaranteed loan is not subject to refinancing risk (e.g., the term matches the amortization period).
    • Guaranteed loan is not subject to interest rate exposure (i.e., the loan has a fixed interest rate without the use of an interest rate swap).
    • In the case of generation, the amortization period on the guaranteed loan is less than the length of the Power Purchase Agreement.
  • Confirmation of support of the Indigenous community for the project and the loan guarantee (for example, a Band Council Resolution).
  • Security pledged in support of the guaranteed loan, satisfactory to the Province.
  • Satisfactory review of terms and conditions of senior project financing by the Province.
  • Satisfactory review of the financial status of the applicant and any project partners by the Province.
  • Project agreements in place for supply, construction, management, operation and connection, and corporate structure satisfactory to the Province, including partnership or joint venture agreements.

    The Province’s review of these agreements will include an evaluation of whether the following protections are in place:

    • The applicant has the ability to influence key decisions of the project which could adversely impact its income from the project, such as assumption of debt or other significant liabilities, significant changes in the budget, and changes to the operator/manager.
    • Risk mitigation measures are in place to protect against regulatory, construction and operational risk. For example, agreements are based on a fixed price, agreements contain milestone dates that will allow the project to achieve its target commercial operation date, and agreements contain warranties and performance guarantees.