CALGARY — A deal that was billed as Canada’s largest-ever Indigenous equity ownership agreement has hit a snag.
TC Energy Corp. said Tuesday the $1-billion agreement, announced in July, that would see it sell a minority stake in its Western Canadian natural gas transmission network to a consortium of Indigenous communities has been delayed.
The deal is meant to enable 72 communities to take a 5.34 per cent stake in the Nova Gas transmission system and Foothills pipeline assets, which comprise a combined 25,000-kilometre network of natural gas infrastructure.
But TC Energy said the deal has been delayed “due to an identified transaction structuring issue within the NGTL partnership.”
Bloomberg News reported Monday that a $1-billion bond deal to finance the agreement did not close as planned.
The deal was backed by the Alberta Indigenous Opportunities Corp. and negotiated by a consortium committee representing Indigenous communities across Alberta, British Columbia and Saskatchewan.
The AIOC is an Alberta Crown corporation that was established in 2019 and provides loan guarantees ranging from $20 million up to $250 million for eligible projects. In the case of the TC Energy deal, the AIOC is providing communities with a $1-billion equity loan guarantee to support the newly formed Indigenous-owned investment partnership.
The AIOC referred all questions on Tuesday to TC Energy. A spokesperson for Alberta Indigenous Relations Minister Rick Wilson said while the Alberta government is aware of the delay, it is also referring all questions to TC Energy.
Representatives of the Indigenous consortium have not yet responded to a request for comment.
When the deal was announced, it was hailed by politicians as well as Indigenous and business leaders as a game-changer.
Inclusive of debt, the deal has a total enterprise value of $1.65 billion, making it Canada’s largest-ever Indigenous equity ownership agreement.
“Imagine if we — Canada, our industry, our company TC Energy — had taken this approach decades ago,” said TC Energy CEO François Poirier at the time.
“Imagine how much we could have gotten done, how much we could have built together, and how many benefits would have been created for Indigenous communities.”
“An unprecedented number of Indigenous communities from Alberta, Saskatchewan and British Columbia have already expressed their interest in being part of this partnership,” said Alberta Premier Danielle Smith at the time.
“This is a clear demonstration that many Indigenous people support our energy industry — they want to be part of it.”
The sale of a stake in the NGTL system is also intended to help TC Energy repay some of its debt.
The company said Tuesday it remains focused on developing a transaction that “delivers meaningful distributions to Indigenous communities while upholding the fundamental value of the NGTL System and the Foothills Pipeline assets.”
The company will continue to provide material updates as they become available, TC Energy said.
This report by The Canadian Press was first published Sept. 10, 2024.