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How it Works

How AIOC Loan Guarantees Support Partnerships

AIOC helps reduce financial barriers to facilitate Indigenous participation in medium to large-scale investment opportunities.

We serve as a financial catalyst for partnerships and projects that generate sustainable inter-generational revenues for Indigenous Nations and groups.

Our provincially backstopped loan guarantees support Indigenous Nations and groups to borrow capital to fund the debt and equity portions of an acquisition, mitigate financial risk and reduce the costs of borrowing such capital.

$3 Billion
Loan Guarantee Capacity

Loan Guarantee
Program $20M to $250M (per project/ acquisition)

Capacity Grants $4M Annually (Discretionary)

Project Eligibility

To be eligible for an AIOC loan guarantee, the project must meet the following criteria.

1. Fall Under One of Our Mandated Sectors

  • Natural Resources
  • Transportation
  • Agriculture
  • Telecommunications
  • Tourism
  • Technology
  • Health Care

2. Offer a $20-$250 Million Investment Opportunity

The program is designed to support mid to large-scale investments. The minimum available loan guarantee is $20 million. The maximum is $250 million, with the ability to increase the limit pending ministerial approval.

3. Involve Eligible Indigenous Nations and Groups

  • Indigenous Nations and groups approved by a ministerial order.
  • Nation-owned or community-owned business entity administered by an elected Council.
  • Other Indigenous communities with approval by Ministerial Order.
  • Private, Indigenous-owned businesses ARE NOT eligible for an AIOC loan guarantee.

Depending on the size of the investment or the geographical area involved, AIOC loans can be granted to an eligible individual applicant or a consortium.

4. Meet Eligible Geography Requirements

  • An acquisition or project can be up to 100% owned by a single Indigenous Nation or group, or consortium.
  • Acquisitions or projects outside Alberta may qualify, providing:
    • 25% of Indigenous ownership is by Indigenous Nations and/or groups located in Alberta.
    • The acquisition or project has a net benefit to Alberta.

5. Meet Risk and ROI Criteria

AIOC conducts due diligence to ensure:

  • Projects/acquisitions are commercially viable and low risk.
  • Cash flows are adequate to service the guaranteed loan.
  • Indigenous partners must receive economic benefits (immediate and ongoing).
  • Industry or investment partners must have significant skills and expertise as asset operators.

The Process

Phase 1: Opportunity Screening

An investment opportunity is identified. The Indigenous Nations and groups decide if they wish to pursue discussions.

Phase 2: Introduction

The industry partner formalizes the intent of the Indigenous Nations and groups to participate in the process, drafting letters of intent, confidentiality agreements and more.

Phase 3: Project Kick Off

An initial meeting will be organized to bring the industry partner and Indigenous Nations and groups together. The industry partner will outline required steps, including the creation of a negotiation committee and signing of a non-binding letter of intent.

Phase 4: Formalizing the Negotiation Committee 
and Selecting Advisors

Negotiation committee members are appointed by the Indigenous Nations and groups. Roles and responsibilities will be set out.

Phase 5: Due Diligence

Indigenous Nations and groups, and their advisors, perform due diligence requirements. If they are seeking an AIOC loan guarantee, AIOC will conduct its own parallel risk evaluation.

Assessment criteria may include:

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

At this stage, Indigenous Nations and groups that are pursuing an AIOC loan guarantee may opt to apply for an AIOC capacity grant to help cover associated costs.

Phase 6: Negotiations

The terms of the deal are negotiated (including price, the ownership stake, commercial terms, covenants, rights, and obligations of each party) and written into a legal contract. Any required legal entities, administrative agencies or services are established.

Phase 7: Financing

The Indigenous investor(s) takes the necessary steps to secure the funds required to complete the transaction. They complete the AIOC loan guarantee application. Once approved, the loan guarantee is submitted to the financial institution as collateral to secure the loan.

Phase 8: Closing

Once financing is complete and legal documents are signed the deal is closed.

Phase 9: Active Partnership (Post-Closing)

Once the Active Partnership stage begins, the parties are responsible for building or operating the asset, following all financial, regulatory and compliance requirements. Communication and reporting processes are formalized between all stakeholders.

Roles and Responsibilities

Learn the various stakeholders: Industry partners, Indigenous Nations and groups, negotiation committee, lenders, advisors and the AIOC.

Learn More

Due Diligence

To protect the financial interests of Indigenous partners, the Government of Alberta and Alberta taxpayers, AIOC is rigorous in conducting due diligence.

Considerations in the assessment can include (but are not limited to) project stage, market assessment, operational history and cash flow certainty.