Canada’s EDC Helps Coastal GasLink Financing

Export Development Canada (EDC), the country’s export credit agency, has extended C$250-$500mn (US$178-$356mn) in project financing to the partnership building the Coastal GasLink (CGL) pipeline, which will deliver natural gas from northeast BC to LNG Canada’s 14mn mt/yr liquefaction and export project at Kitimat, on the province’s northern coast.

A spokeswoman for EDC confirmed the loan agreement – which was signed April 28 – in a May 5 email to NGW. TC Energy, meanwhile, has said the C$6.6bn cost of CGL will be financed largely by a syndicate of six major banks.

The project financing was extended to the Coastal GasLink Pipeline Limited Partnership, comprised of TC Energy, KKR & Co and Alberta Investment Management Corp (AimCo). KKR and AimCo have committed to acquiring a combined 65% equity interest in CGL from TC Energy in a deal expected to close in Q2 2020.

News of the project financing was not welcomed by hereditary leadership of the Wet’suwet’en First Nation, who are opposed to CGL traversing their un-ceded traditional territory in north-central BC.

Hereditary chief Na’Moks, who also goes by the name John Risdale, said in media reports published May 4 the hereditary chiefs remain “staunchly opposed” to the project, even though they have recently reached a tentative agreement on rights and title with both the BC and federal governments.

“This is the government that is lending them the money. That’s the bottom line,” he told The Star media outlet. “It doesn’t make sense to me to put money into something that is bound to fail because the opposition to this is so high.”

Elected leaders of the First Nation have signed an agreement supporting the pipeline, but that agreement has been rejected by the hereditary leaders. The dispute sparked blockades near the CGL right-of-way and solidarity protests across Canada earlier this year.

In a related development, elected leaders of the Wet’suwet’en say they reject the memorandum of understanding (MOU) on rights and title reached by the hereditary leaders because it was negotiated “behind closed doors” and not in a “feast hall” process, as is Wet’suwet’en custom. Elected leaders were not part of the negotiations that led to the MOU, which deals only with rights and title and not with the pipeline project.

Hereditary leaders hope to formalise the MOU with federal and provincial representatives at a signing ceremony in Wet’suwet’en territory later this month, but timing of that may be impacted by Covid-19 measures.