Canada is looking to sell a stake in the Trans Mountain oil pipeline to indigenous groups through a special-purpose vehicle that will allow individual communities to buy into the enterprise, Bloomberg News reported on Tuesday.
The Canadian government will provide the groups with access to capital so they do not have to risk any of their own money to participate, according to the report, citing a letter from Finance Minister Chrystia Freeland’s office, dated Aug. 2.
The communities’ equity interest in Trans Mountain will provide them with cash flows and allow them to jointly exercise governing rights, the report added.
Indigenous groups that take part in the special purpose vehicle will not be excluded from participating in later rounds offering additional equity in the pipeline and the government will soon begin discussions with the groups along the pipelines route and shipping corridor, the report said.
Freeland’s office and Trans Mountain did not immediately respond to a Reuters request for comment on the report.
Prime Minister Justin Trudeau’s Liberal government bought the Trans Mountain pipeline in 2018 from Kinder Morgan Inc to ensure the expansion project got built and provided a C$10 billion loan guarantee to TMC.
But the project has been hampered by regulatory obstacles, environmental opposition, and construction delays, and is now anticipated to cost C$30.9 billion ($23.02 billion), more than quadrupling the C$7.4 billion budgeted in 2017.
A Canadian government agency last week guaranteed fresh commercial loans of up to C$3 billion to the pipeline expansion project.
(Reporting by Juby Babu in Bengaluru; Editing by Rashmi Aich)