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By Amanda Stephenson
(Reuters) -Canadian pipeline operator Enbridge is selling a stake in its Westcoast natural gas system to a consortium of 36 First Nations, the first deal to include financing from a new federal loan program aimed at helping Indigenous groups own parts of resource projects.
Enbridge said on Thursday that Stonlasec8 Indigenous Alliance will buy a 12.5% stake in its Westcoast pipeline for C$715 million ($511.19 million).
The pipeline stretches 2,900 kilometers (1,802 miles) from northeast British Columbia to the Canada-U.S. border, with a capacity of 3.6 billion cubic feet of natural gas per day.
Canada's First Nations are increasingly buying stakes in energy projects as they seek economic benefits from projects on their land, while companies look to raise capital and secure Indigenous support that can be critical to regulatory approval.
Enbridge has now struck four equity deals with Indigenous groups, including the 2022 sale of a C$1.12-billion minority stake in seven Alberta oil pipelines to a group of First Nations.
The Canadian government has said it is interested in selling a stake in its C$34-billion Trans Mountain oil pipeline to Indigenous groups.
For the deal announced on Thursday — which Enbridge said was in the works for two years — Stonlasec8 will receive C$400 million in loan guarantees from the Canada Indigenous Loan Guarantee Corporation.
The federal entity, which launched in December, aims to provide up to $10 billion in Indigenous loan guarantees to help First Nations access capital.
In a March letter to federal political party leaders, the CEOs of 14 energy companies — including Enbridge — said increasing Indigenous ownership in energy infrastructure is necessary if the country is to expand its oil and gas sector and build pipelines.
Chief David Jimmie, president and chair of Stonlasec8 and head of the Squiala First Nation, said energy assets such as the Westcoast pipeline have for decades crossed Indigenous territory, but until now communities have been unable to reap the financial benefits.
He said he is pleased energy companies increasingly see co-ownership as vital to getting the necessary support from First Nations for projects on Indigenous land.
"They recognize that without Indigenous participation, you're going to find it more and more difficult to approach these types of projects," Jimmie said.
($1 = 1.3987 Canadian dollars)
(Reporting by Amanda Stephenson in Calgary and Tanay Dhumal in Bengaluru; Editing by Vijay Kishore and Rod Nickel)