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Loan Guarantees

What you Need to Know about AIOC Indigenous Loan Guarantees

AIOC Indigenous loan guarantees help Indigenous Nations and groups access capital that might otherwise not be available to them.

This empowers Indigenous Nations and groups to become significant investment partners in medium to large-scale revenue-generating projects involving new or existing assets. All applications are considered on a case-by-case basis.

* AIOC’s loan guarantee and capacity grant programs are discretionary. A decision to provide a loan guarantee and the percentage of the loan the guarantee will cover, or a capacity grant are at the sole and absolute discretion of AIOC.

What is a loan guarantee?


A loan guarantee is not a loan – it’s a financial promise that acts as a safety net for both the borrower and the lender to access financing.

For the borrower (such as an Indigenous Nation or group), it allows access to a loan without putting community assets or own-source revenue at risk. For the lender (such as a bank), it provides assurance that the loan will be repaid even if the borrower faces challenges in making payments. For AIOC-guaranteed transactions, loan repayment is made from revenues generated by the asset or investment itself, helping to ensure the loan is self-sustaining.

Because AIOC stands behind the guarantee, no community assets are at risk in the event of a default. This structure allows for Indigenous Nations and groups to participate safely in major investment opportunities.
AIOC has up to $3 billion in capacity to support these loan guarantees.*

* Loan guarantees are only activated if a loan default occurs. In that case, AIOC repays the lender and assumes ownership of the asset. AIOC would then sell the asset to recover the costs, and if any shortfall remains, it would be covered through the Government of Alberta’s balance sheet.

How a Loan Guarantee Supports Indigenous Investment

Before a bank or lending institution will provide an equity loan, they require either collateral or a loan guarantee to cover them in the event of a default.

The challenge for Indigenous Nations and groups is that traditional forms of collateral (such as Crown land or assets) cannot be used, due to restrictions in the Indian Act.

The Government of Alberta (GoA) recognized this as an obstacle to Indigenous Nations and groups participating as equal partners in the economy. They established the Alberta Indigenous Opportunities Corporation as a “risk-sharing” mechanism. This gives lenders the assurance required to extend credit to Indigenous Nations and groups by offering government backstopped loan guarantees.

Because AIOC Indigenous loan guarantees are secured by the Alberta Government, Indigenous borrowers can often qualify for improved lending terms.

How it Works

Once an investment opportunity involving Indigenous Nations or groups is identified, AIOC works with all stakeholders to assess and advance the opportunity. It could involve investment in a new or existing project or asset. The process may vary for each project and can typically range from six months to a year.

Phase 1: Opportunities Screening

The Indigenous Nations or groups determine if they want to participate in the process. This can be facilitated through discussion and by working through key questions and considerations.

Phase 2: Introduction

Once the opportunity has been presented, the industry partner typically facilitates a process to formalize the intent of the Indigenous Nations or groups to participate in the process.
This may involve letters of intent and agreements regarding confidentiality.

Phase 3: Project Kick Off

The kick off indicates the formal launch of the process. Typically, the industry partner will organize a kick off meeting/event involving all invited Indigenous Nations and groups. Participants typically sign a non-binding letter of intent and discuss next steps, including the creation of a negotiation committee.

Phase 4: Formalizing the Negotiation Committee and Selecting Advisors

Once negotiation committee members have been appointed by the Indigenous Nations and groups, roles and responsibilities need to be outlined so work can commence.

Phase 5: Due Diligence

The Indigenous Nations and groups work with their advisors to conduct due diligence on the investment opportunity. Assuming the Indigenous Nations and groups have expressed to AIOC they are likely to seek an AIOC loan guarantee, AIOC often conducts its due diligence in parallel to the Indigenous Nations and group(s).

The due diligence process includes a detailed assessment of:

  • The project stage
  • Operational history (specific to established assets)
  • Market Assessment for the product / service
  • Evaluation of technology involved
  • Cash flow analysis/projections

The Indigenous Nations or Groups can Apply for an AIOC Capacity Grant

AIOC has a limited pool of discretionary funds available to assist Indigenous Nations and groups in moving forward. The AIOC capacity grant provides funding to support the Indigenous Nations and groups in the due diligence process and to hire financial, legal or tax advisors.

Phase 6: Negotiations

The parties involved negotiate the terms of the deal. This includes the price, the ownership interest, commercial terms, and the covenants, rights, and obligations of each party. Once agreed, the deal terms are formalized into legal contracts. During this step, the legal entities are set up and administrative agents or services are decided.

Phase 7: Financing

The financing phase of a deal involves securing the necessary funds to complete the transaction.

Indigenous Nations and Groups Apply for AIOC Loan Guarantee

Once a decision has been made to participate in the investment, the Indigenous Nations and groups will apply for the AIOC loan guarantee. This will be provided to the financial institution to secure the loan, prior to completing the transaction.

Phase 8: Closing

A deal closes when the legal documents are signed and the financing is completed, often simultaneously, signifying the deal is officially completed.

Phase 9: Active Partnership (Post-Closing)

Once the deal has been closed, the Active Partnership stage focuses on ensuring financial and regulatory reporting and compliance are operating smoothly. This phase also focuses on arrangements for ongoing communications between industry, the board of directors of the limited partnership (LP) and the members of the Indigenous Nations and groups.

As revenue is generated:

  • A portion of revenue goes toward paying off the debt and a portion is dispersed to the Indigenous Nations and groups as revenue.
  • The loan must be repaid in its entirety, according to the conditions of the agreement.
  • Each participating Indigenous Nation or group can independently determine what they wish to do with the profits. This could include investing in:
    • Community infrastructure
    • Community programs
    • Business opportunities
    • New investment opportunities
    • And more

Eligibility Requirements

The AIOC loan guarantee program is exclusively available to Indigenous Nations and groups and Nation-owned or community-owned business entities administered by an elected Council. It IS NOT available to private, Indigenous-owned businesses. To qualify for AIOC support, the opportunity must satisfy the following criteria:

  • The applicant(s) must be an eligible Indigenous group.
  • The investment opportunity must fall under one of the following sectors:
    • Natural resources
    • Agriculture
    • Telecommunications
    • Transportation
    • Tourism
    • Healthcare
    • Technology
  • The investment value of the Indigenous group Investment must fall between $20M to $250 million.
  • The investment opportunity must demonstrate a benefit back to Alberta
  • The opportunity must ensure a high probability of meaningful cashflow to Indigenous investors.

See if Your Group is Eligible

Complete our Online Self-Assessment

Selection Criteria

All loan guarantee applications are reviewed on a case-by-case basis. Projects are evaluated according to the following key criteria:

Investments must be commercially viable and applicants must be able to service the debt.

Indigenous partners must receive economic benefits from the partnership​.

Industry and/or investment partners must have significant skills and expertise and be high-quality operators in their field.

Find out If You're Eligible

Complete our Online Self-Assessment to see if you may qualify.