RE Royalties - Innovative Financing Solutions

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

The energy transition is one of the greatest investment challenges of our time. RE Royalties has tackled this issue with an unconventional approach: the royalty model. The Canadian company applies a proven principle from various industries to renewable energy. Instead of traditional loans or equity investments, it provides capital and receives a share of the project proceeds in return. This structure is well-received by developers because it avoids dilution and offers flexible terms. Since 2016, the company has invested over CAD 80 million in approximately 135 projects, ranging from solar and wind to battery storage.

The North American market for clean energy financing reached approximately USD 120 billion in 2025. RE Royalties deliberately focuses on the often-neglected group of mid-sized project developers with investments ranging from USD 10 million to USD 30 million. These agile partners can act quickly—a decisive competitive advantage. The company's operational speed has already paid off, for example, in an investment that was finalized within three weeks over the Christmas holidays, enabling a project developer to save their project. Since RE Royalties was founded, its unleveraged internal rate of return has been over 19%. Over the past five years, the company has achieved average annual revenue growth of 60%.

The recent announcement of a strategic review in collaboration with PricewaterhouseCoopers demonstrates that RE Royalties intends to actively shape its growth. With current letters of intent totaling over CAD 20 million and a pipeline of approximately CAD 200 million in potential investments, the company is well-positioned. The recent partnership with Solaris Energy, in which RE Royalties is investing up to USD 9 million in two solar portfolios, is exciting. The high level of insider ownership at 24% underscores management's confidence in its own business model. For investors, this presents an opportunity to gain broad exposure to the growing renewable energy market without the usual hurdles associated with private equity funds. The share is currently trading at around CAD 0.375.

Read the full article here.