On Dec. 19, 2014, the Ontario Power Authority (now merged with
Ontario's Independent Electricity System Operator, the
"IESO") announced the availability of new interim funding
under the auspices of the Aboriginal Renewable Energy Fund (the
"AREF"). The AREF is designed to fund the planning stages
of renewable energy project development for Aboriginal communities
within the province of Ontario. The new interim funding is intended
to enable First Nations and Métis communities to undertake
due diligence work that will foster future participation in
Ontario's Large Renewable Procurement ("LRP") Program
for renewable energy projects (expected to be launched in 2015) and
in Ontario's existing feed-in tariff ("FIT")
The AREF forms part of a larger initiative to establish the
Aboriginal Energy Partnerships Program, in response to the
ministerial direction issued by the Ontario Minister of Energy on
Nov. 21, 2014. Consistent with the objectives outlined in the
latest Long-Term Energy Plan, this Program is designed to promote
Aboriginal community participation in the renewable energy sector.
New Funding Available for Large Projects
The present version of the AREF rules provide that an applicant
may receive funding for one or more LRP projects, to a maximum of
$40,000. This maximum amount may form up to 80% of the eligible
external expenses for one or more LRP Projects. An LRP Project is
any project that is intended to be the subject of a LRP I Contract,
undertaken by a qualified LRP I RFQ applicant.
The new AREF funds are earmarked for "Partnership
Stream" activities, which include the independent legal,
technical, and financial due diligence costs incurred to determine
whether an applicant will move forward on a project with a
particular project partner. These are referred to as "eligible
Previous Funding Programs Continue
The AREF continues to provide funding for small and large FIT
projects, either under the Partnership Stream or the Organizational
Development Stream (or both). The Organizational Development Stream
includes the legal costs accrued to establish a structure to
organize and run the project. FIT Projects may receive up to
$40,000, comprising up to 80% of the applicant's actual
eligible costs. Funding is proportionate to the number of projects
being pursued: a single project only qualifies an applicant for
$20,000 in funding, while pursuing two raises the maximum to
$30,000; three or more projects may qualify an applicant for the
Funding is also still available via a Development and Approvals
Stream, which assists Aboriginal communities with certain
"soft costs" of developing a renewable facility, such as
engineering and legal services. This funding is available for up to
five projects that have a nameplate capacity between 10 to 500kW.
Each project may receive up to $100,000, to cover 50% of eligible
costs. Funding is also available for projects of over 500 kW in
amounts up to $500,000.
General Applicant Requirements
To qualify for the AREF, applicants must be: (i) a First Nation
that is a "band" under the Indian Act; (ii) the
Métis Nation of Ontario (or any of its active Chartered
Community Councils); or (iii) a person, other than a natural
person, which represents the collective interests of an Aboriginal
In order to be eligible for funding, proposed projects must be
capable of constituting a renewable generating facility (that is,
using biogas, biomass, landfill gas, wind, solar, or water power)
and be located in Ontario. The project must have the support of the
Aboriginal community, and have Aboriginal participation (as defined
in the project documents) of at least 15% for a project under
100MW, and 10% for projects equal to or greater than 100 MW.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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