RE Royalties - Expanding its solar commitment in the US

An opinion piece by Armin Schulz (Apaton Finance GmbH).

Vancouver-based financing company RE Royalties is consistently pushing ahead with its expansion in the American solar market. With a second investment tranche of USD 800,000, the total investment in the partnership with developer Solaris Energy, which began in January, now amounts to USD 3.8 million. The total volume of the agreement is up to USD 9 million for two project portfolios with decentralized solar power plants. The first tranche comprises 15 individual projects in five states (California, Maine, Delaware, New Hampshire, and Colorado), 9 of which are already under construction. The structured financing with milestone-based payments and a minimum return over 25 years demonstrates how the company is scaling its royalty model in the commercial and industrial solar power generation segment.

RE Royalties' business model combines traditional project financing with long-term revenue sharing. By granting secured loans to project developers, the company secures not only interest income but also royalty shares in future revenues. The capital recycling effect is crucial for scalability. Once the short-term bridge financing has been repaid after an average of three years, the capital is available for new investments. With a lean cost structure and only nine employees, the existing portfolio of over 100 royalties can be managed without any significant increase in personnel.

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