RE Royalties: Building Bridges for Clean Energy

An opinion piece by Matthias Schomber (Apaton Finance GmbH).

RE Royalties has established itself as a pioneer in revenue-based royalty financing for renewable energy and demonstrates this with its proven, stable and solid business model. While traditional banks often overlook medium-sized project developers, the Canadian company fills this financing gap with tailored, as-non-dilutive-as-possible solutions that secure long-term cash flows.

Operationally, the business is evidently performing quite well, as the latest company announcements show. For example, with an investment of USD 1.5 million, the company secured a gross revenue royalty on a portfolio of nine rooftop solar installations at commercial shopping centres in the Philippines. At the same time, the USD 4.6 million loan for a project to upgrade biogas into renewable natural gas (RNG) in the US state of Wisconsin was repaid in full, while annual royalty payments are now flowing. With over 100 active royalties in North and South America, as well as Asia, a weighted return of well over 10% since inception, and growing revenue, management is driving global diversification.

From a technical analysis perspective, the share is in an interesting position following a consolidation phase. Although the share recently fell below the key support level at CAD 0.30, it subsequently stabilised at the even more important support level at CAD 0.27. This floor has held so far, and the share is currently trading at CAD 0.29. It now needs to climb back above CAD 0.30; only then can the share regain momentum towards CAD 0.35, the first technical-analysis target and beyond that, set its sights on CAD 0.50 to CAD 0.60. With solid management and a commitment to sustainability goals, the company may be worth considering as a potential addition to a diversified portfolio.

Read the full article here.