On CDPQ's MCK Deal and CPP Investments' Cedar Leaf Deal
The Mohawk Council of Kahnawake (MCK) and the Caisse de dépôt et placement du Québec (CDPQ) want to invest jointly in renewable energy projects. The partners are also opening the door to financing projects in other Indigenous communities.
Quebec needs to produce more electricity to decarbonize the economy and meet growing demand. Many projects will be located on Indigenous communities’ territories, and these communities will be called upon to become partners.
Hydro-Québec plans to invest between $90 billion and $110 billion to increase its production, according to its 2035 Strategic Plan.
“As we begin this new phase of development, it’s important to include the First Nations,” said MCK Grand Chief Cody Diabo in an interview. “It’s our territory where the projects will be built. These are our resources.”
Nevertheless, access to capital to finance projects of this scale represents a challenge for the various communities. The MCK, therefore, decided to approach the Caisse to create a partnership.
The partnership would involve projects on traditional Kahnawake Kanien’kehà:ka (Mohawk) territories, but it could also provide resources to other Indigenous communities that so wished.
“They can also serve as an example for other First Nations to come and take advantage of the set-up that we are in the process of doing and to extend this beyond projects that would impact the Mohawks of Kahnawake,” said CDPQ senior vice-president Emmanuel Jaclot, who is head of infrastructure.
The MCK already has experience of participating in an energy project. Last April, the Council and Hydro-Québec announced that the community would hold a minority stake in the Hertel-New York interconnection line, which will export electricity to New York State.
Diabo estimates that the partnership could fund at least “two projects” over the next few years but stresses that there is no limit to the number of projects the partners could participate in.
He identified a possible renovation or expansion of the Beauharnois power station in the Montérégie region: “That’s something that would be quite important for us, and we’d be keen to get involved. It’s along the St. Lawrence River. It’s our traditional territory.”
Jaclot pointed out that the development of energy projects takes time. If the partners managed to take part in “one or two projects a year,” he believes that would represent a “success.”
“We do this to make money at the Caisse,” continued the vice president. “So there’s no limit. As long as the projects are profitable, we’ll be happy to do them.”
CDPQ issued a press release on this deal on Monday stating it will partner with MCK to finance renewable energy infrastructure projects:
The Mohawk Council of Kahnawà:ke (MCK) and CDPQ are pleased to announce the creation of a financial and strategic partnership to jointly invest in renewable energy infrastructure projects. The partnership aims to facilitate access to funding for the MCK and other Indigenous communities interested in taking part in the implementation of these projects in Québec.
In addition to easing access to funding and contributing to the success of projects, the MCK and CDPQ will seek to position communities at the heart of project development by promoting their long-term participation. As co-investors, the two organizations will also provide close oversight to foster a sustainable and inclusive development approach.
Together, the two organizations plan to:
- Establish and strengthen partnerships based on trust and an alignment of interests, as well as the social acceptability of projects
- Provide the technical capacity communities need to negotiate complex agreements and analyze the financial terms of large-scale projects
- Propose an innovative solution that allows communities to participate and gives them access to sufficient capital to hold a stake in projects
“For over a century, major energy infrastructure projects have impacted Indigenous peoples’ rights and lands. We believe the time is right for our communities to participate in the energy transition by owning and benefiting from energy infrastructure on our ancestral lands,” said Ohén:ton Í:rate ne Ratitsénhaienhs (Grand Chief) Cody Diabo, Grand Chief of the MCK. “We have developed this partnership to provide the economic opportunity for First Nations and Inuit communities to maximize their stake in large-scale energy infrastructure on their lands, and benefit from the revenues generated.”
“In Québec, numerous renewable energy projects will cross traditional Indigenous territories, which presents an opportunity to foster the financial participation of the communities involved and ensure that the partners’ priorities are well aligned,” said Emmanuel Jaclot, Executive Vice-President and Head of Infrastructure at CDPQ. “We are delighted to be working with the Mohawk Council of Kahnawà:ke in this partnership to fund renewable energy infrastructure projects, which reflects our commitment to supporting sustainable and inclusive development initiatives while contributing to Québec’s energy transition.”
The MCK will engage with interested Indigenous communities that wish to explore this opportunity to meet their capital needs. The MCK and CDPQ are collaborating to identify projects where this investment solution can be implemented.
ABOUT THE MOHAWK COUNCIL OF KAHNAWÀ:KE
The MCK is the First Nations governing body for the Mohawks of Kahnawà:ke. In addition to providing essential services within the Mohawk Territory of Kahnawà:ke, the MCK engages in socioeconomic initiatives that reflect the community’s rights and environmental values. The MCK is actively involved in renewable energy investments, including the 24 MW Des Cultures wind farm, the 147 MW Les Jardins wind farm, and the 58 km Hertel-New York Interconnection Line, reinforcing its commitment to sustainable development and economic self-determination.
ABOUT CDPQ
At CDPQ, we invest constructively to generate sustainable returns over the long term. As a global investment group managing funds for public pension and insurance plans, we work alongside our partners to build enterprises that drive performance and progress. We are active in the major financial markets, private equity, infrastructure, real estate and private debt. As at June 30, 2024, CDPQ’s net assets totalled CAD 452 billion. For more information, visit cdpq.com, consult our LinkedIn or Instagram pages, or follow us on X.
Alright, my quick thoughts on this deal. The Mohawk Council of Kahnawà:ke (MCK) is doing the right thing partnering up with CDPQ to explore renewable energy projects on indigenous land.
And I agree with Grand Chief Diabo when he states:
"We believe the time is right for our communities to participate in the energy transition by owning and benefiting from energy infrastructure on our ancestral lands."
It's now or never and these deals are going to benefit all stakeholders involved: the MCK, CDPQ, Quebec's Government, Hydro Quebec and Quebecers in general.
Cody Diabo was elected as the new grand chief of the MCK in July 2024 and he stated this at the time:
"At first the initial shock and speechlessness kind of set over, which is a little rare for myself. I have heard about all the support I had in the community," said Diabo.
"There's a lot of work that needs to be done. We're in constant struggles with the external governments. And I think it's time now that we start putting them to task."
He didn't waste any time. Last month, he signed a memorandum with the Quebec government to strengthen their partnership:
Quebec Premier Francois Legault, alongside the Grand Chief of the Mohawk Council of Kahnawà:ke, Cody Diabo, signed a memorandum of understanding Friday in Montreal, to document the intentions of both governments and provide roadmap to their partnership.
“The Mohawk Council of Kahnawà:ke has advocated for an agreement that is simplified, clear, and mutually respectful, one that avoids language and references that have historically caused disputes,” said Cody Diabo, Grand Chief of the Mohawk Council of Kahnawà:ke.
“Today marks a new beginning in Quebec’s relationship with Kahnawà:ke, and I look forward to strengthening our partnership in the years to come,” said Premier Legault.
“I want to personally thank Grand Chief Cody Diabo and his team for negotiating with us in good faith and for our mutual benefits. Today’s memorandum of understanding is for me a historical step. We will have other steps after, but it’s a step that demonstrates the trust between Quebec and Kahnawà:ke.”
Legault acknowledged the up to 211 acres of land owed to the Mohawk Council of Kahnawà:ke – acquired by the province nearly 20 years ago during the construction of Highway 30. Legault says they will settle the matter.
“Maybe at times we might not agree on everything, but I think as long as we’re focusing on what’s important, we can accomplish many things. History has shown that together we are stronger and we are better working together rather than separately or at odds,” said Diabo.
Diabo says building a productive, enduring relationship “will not happen overnight.”
“It requires honest, sustained effort to identify and implement cooperative solutions that respect both our jurisdictions,” he said. “We believe that this new foundation creates the conditions necessary for meaningful, result-driven discussions on shared interests and paving the way for important conversations grounded in mutual trust, with always the focus of the seven generations to come.”
That is the background behind the latest deal with CDPQ and again, I think Cody Diablo is doing the right thing as a leader and the structure if this deal isn't just financial:
- Establish and strengthen partnerships based on trust and an alignment of interests, as well as the social acceptability of projects
- Provide the technical capacity communities need to negotiate complex agreements and analyze the financial terms of large-scale projects
- Propose an innovative solution that allows communities to participate and gives them access to sufficient capital to hold a stake in projects
Now, I know some cynics and skeptics will ask why is CDPQ doing deals with the MCK.
The short answer is because it's their land and financially beneficial for all parties.
Moreover, this will lead to strong economic development over many years for the MCK as we transition to a decarbonized economy.
Importantly, this isn't a handout and other Canadian pension funds have signed similar deals with indigenous people of Canada.
For example, last month I discussed how OMERS Infrastructure sold its 48% interest in the East-West Tie Line project to Hydro One:
Hydro One has agreed to purchase its interest in the partnership for $257 million in cash, subject to customary adjustments. The transaction results in a partnership with the remaining owners of the East-West Tie Line – the Bamkushwada Limited Partnership, a consortium of six First Nations, and affiliates of NextEra Energy Canada, LP who own approximately 3.5 per cent and 48 per cent respectively.
“Hydro One has a long history of owning and operating transmission infrastructure in northern Ontario,” said David Lebeter, president and CEO, Hydro One. “By investing in this critical transmission infrastructure, we not only support the reliable delivery of electricity but also contribute to the long-term economic opportunities and shared prosperity in the region.”
“We are very proud of our 12-year partnership with co-shareholders and our collaboration with First Nations to develop and operationalize the East-West Tie,” said Michael Hill, executive vice president and Global Head of OMERS Infrastructure. “Hydro One, a prominent Canadian company that already owns and operates more than 90 per cent of Ontario’s transmission network, was considered the best strategic partner to support the company’s continued reliable operations.”
“Enbridge is pleased to have participated alongside our partners in developing and bringing into service the East-West Tie project, with a focus on Indigenous inclusion and participation,” said Matthew Akman, executive vice president, Corporate Strategy and President, Power, Enbridge. “Enbridge has enjoyed a strong relationship with NextEra, OMERS and the Bamkushwada Limited Partnership and believe Hydro One’s experience and ownership of other Ontario transmission assets will provide value to the partnership.”
Similarly, CDPQ's Executive Vice-President and Head of Infrastructure Emmanuel Jaclot stated this in the press release:
“In Québec, numerous renewable energy projects will cross traditional Indigenous territories, which presents an opportunity to foster the financial participation of the communities involved and ensure that the partners’ priorities are well aligned. We are delighted to be working with the Mohawk Council of Kahnawà:ke in this partnership to fund renewable energy infrastructure projects, which reflects our commitment to supporting sustainable and inclusive development initiatives while contributing to Québec’s energy transition.”
Keep in mind, through this partnership, other projects in other asset classes can develop and CDPQ has a mission for sustainable and inclusive growth.
In other related news, CPP Investments announced last week that Cedar Leaf Capital joined its syndicate of dealers:
Toronto, CANADA (January 27, 2025) – Cedar Leaf Capital, Canada’s first majority Indigenous-owned investment dealer, proudly joins the syndicate of dealers for Canada Pension Plan Investment Board (CPP Investments).
“This is a historic moment for Cedar Leaf Capital and marks the first time a majority Indigenous-owned investment dealer will participate in the debt market at this scale,” said Clint Davis, CEO of Cedar Leaf Capital. “We are honoured to have this partnership with CPP Investments, one of the strongest, most resilient and financially sustainable pension funds in the world. Our involvement in this syndicate demonstrates our collective commitment to supporting an inclusive and robust capital markets industry.”
“We are pleased to welcome Cedar Leaf Capital into our Canadian Dollar syndicate representing CPP Investments in the debt market,” said Sam Dorri, Managing Director of Financing & Balance Sheet Management. “The inclusion of Cedar Leaf Capital enables us to further diversify our dealer base, reaffirming our commitment to the Canadian bond market.”
On October 16, 2024, Cedar Leaf Capital received regulatory approval to open their doors for business. Cedar Leaf Capital is a partnership between Scotiabank, Nch’ḵay̓ Development, Des Nedhe Group, and Chippewas of Rama First Nation.
About Cedar Leaf Capital
Cedar Leaf Capital Inc. is Canada’s first majority Indigenous-owned investment dealer, with a commitment to Indigenous economic reconciliation. The firm will provide services as an underwriter or placement agent of new debt issues for corporate and government clients in Canada, with plans to potentially expand into advisory services and equity capital markets. Cedar Leaf Capital operates as a registered Investment Dealer across all provinces and territories in Canada. The company is regulated by the Canadian Investment Regulatory Organization (CIRO).
About CPP Investments
Canada Pension Plan Investment Board (CPP Investments™) is a professional investment management organization that manages the Fund in the best interest of the more than 22 million contributors and beneficiaries of the Canada Pension Plan. In order to build diversified portfolios of assets, investments are made around the world in public equities, private equities, real estate, infrastructure and fixed income. Headquartered in Toronto, with offices in Hong Kong, London, Mumbai, New York City, San Francisco, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. At September 30, 2024, the Fund totalled C$675.1 billion. For more information, please visit www.cppinvestments.com or follow us on LinkedIn, Instagram or on X @CPPInvestments.
Cedar Leaf Capital Inc. is Canada’s first majority Indigenous-owned investment dealer, with a commitment to Indigenous economic reconciliation.
Have a look at their senior team:
Clint Davis, Chief Executive Officer, a recognized national Indigenous leader in Indigenous business working with Indigenous communities and development corporations from coast to coast to coast. Almost 10 years’ experience encompassing Board Director, Investment Committee and Financial Service industry roles.
Sylvia McGratten, Chief Compliance Officer, with 25+ years experience in finance, risk, compliance and audit with 3 of the Top 5 Canadian banks, securities regulator, and financial services consulting roles.
Steve Somodi, Chief Financial Officer, President FCRT Services with 25+ years experience in public accountancy and industry broker-dealer firms encompassing audit, VP and controller, Chief Financial Officer, Compliance Officer, Corporate Secretary and Board Director roles.Dean Begley, Head of Capital Markets, with 30+ years’ experience in debt capital markets, debt syndication, securitization, and fixed income sales and trading.
Seasoned veterans who know their business inside out and they have a clear mandate and mission:
Our team of seasoned capital market professionals and developing Indigenous talent provides differentiated debt capital markets advice and execution services to Canadian government and corporate clients.
Through active relationship development, coverage and idea generation, we seek to establish roles in dealer syndicates on bond new issue transactions. We act in the capacity of a junior syndicate member in broadly syndicated offerings.
Mission
Deliver best-in-class capital markets advice and services to investors while generating profitable and stable growth for our shareholders. As the first Indigenous owned and led investment dealer in Canada, our objectives also extend beyond those of a traditional market intermediary.
Our broader mission is:
- to foster greater Indigenous participation in the capital markets;
- to create commercial opportunities and expand connections for Indigenous communities; and
- to partner with established market participants to assist them in meeting their reconciliation commitments.
Again, this is a mutually beneficial relationship between CPP Investments and Cedar Leaf Capital, this isn't a handout or part of any DEI initiative, it's simply smart move just like the MCK deal.
I believe in empowering the Indigenous communities of Canada through long-term development deals and other deals which supports their businesses if they are worthy of it.
I do not believe in blank cheques or deals that disrespect our Indigenous communities in any way.
Empower them, don't impoverish them.
Alright, that's a wrap, the days go by way too fast.
Below, "I'm ready to hit the ground running," said Cody Diabo, the new Grand Chief of Kahnawake, on day two of the job as he represented his community at the Assembly of First Nations' General Assembly in Montreal. City News' Alyssia Rubertucci reports.
I'd say he's keeping his promises and moving very fast, signing the right deals with the right partners. This is a new chapter for the MCK and hopefully the beginning of a long and fruitful relationship.
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