Belltown Power - Solar Park
Updated: May 5, 2021
Capacity: 78 MW
Operational: 2021 (est.)
Estimated Annual Generation: 145 GWh
Total Projects: 1
Belltown Power Texas has a portfolio of over 1.4 GW of solar projects in various stages of development across Texas. The projects in this portfolio require letters of credit (LCs) to be posted with the interconnection authority in order to receive interconnection agreements (IAs). These IAs allow the projects to lock in a commercial operations date (COD) and maintain their position in the interconnection queue.
A parent company had provided the majority of development capital for Belltown Texas and was willing to continue funding the remaining development but lacked the capital required to post the large letters of credit (LCs) for these projects.
In order to fund LC commitments for some of their projects, Belltown Texas was considering selling part of their portfolio. However, providing Belltown Texas with the necessary LC commitments would allow them to maintain full ownership of their portfolio and make a significant jump up the value accretion curve before selling closer to the COD stage.
To help Belltown Texas, RE Royalties provided a US$2.8 million letter of credit for up to one year on behalf of Belltown, in order for Belltown to post certain collateral for the Project’s grid connection. This allowed them to lock in a commercial operations date and start negotiating a Power Purchase Agreement. The letter of credit took the form of a loan that paid interest and also included a 20-year gross revenue royalty on the 78 MW Rippey Solar Project.
In March 2019, Belltown repaid the loan and the letter of credit was returned and cancelled, while RE Royalties retained the royalty interest in the Rippey Project.
In April 2020, Belltown announced that it had completed a transaction with an investment partner and commenced construction on the Rippey Project.
In September 2020, the grantor of the Rippey Royalty exercised its option to buy back the royalty as per the terms of the original royalty agreement.
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