RE Royalties Letter of Intent for $10 Million Loan & Royalty on Australian Battery Storage Project
RE Royalties Enters into a Letter of Intent for $10 Million Loan and Royalty on Battery Storage Project in Australia
All amounts in Canadian dollars unless otherwise stated
March 29, 2021, Vancouver, BC – RE Royalties Ltd. (TSX.V: RE) (“RE Royalties” or the “Company”), a global leader in renewable energy royalty-based financing, announced that it has entered into a letter of intent (“Letter Agreement”) with Canigou Molonglo Bess Pty Ltd. (“Canigou”), to finance a 10MW battery storage project (“Project”) located near Canberra, in the Australian Capital Territory (“ACT”), Australia.
RE Royalties will provide a CAD $10 million loan (“Loan”) to Canigou and acquire a gross margin royalty (“Royalty”) for the life of the project. The proposed Loan will be a first-ranking senior secured amortized loan and will be for a period of 4 years. The Loan will bear interest at 10% per annum compounded monthly and the loan will be repaid based on project revenues.
The Royalty will be a 20% royalty on gross margin (revenues less operating costs) during the period that the loan is being repaid and thereafter the Royalty rate will be reduced to 15% of gross margin for the remainder of the life of the project, estimated at up to 10 years.
Canigou will install two separate 5 MW batteries that will support the growth of renewables in the ACT area and provide electricity grid stabilization services and the potential for selling electricity in the wholesale electricity market. The Project will be installed in two stages, with the first battery installation planned to commence in June 2021 and be operational in November 2021. The second battery is planned to be installed and operational in the second half of 2022.
Australia is currently seeing significant growth and demand for renewables and energy storage. This growth and demand are driven by recent electricity outage events, decommissioning of coal power, declining equipment prices, and open access to grid support service markets. The World Bank estimates that 23,000 to 45,000 GWh of batteries and storage will be needed across energy systems by 2050, compared to around 200 GWh today.
Bernard Tan, CEO of the Company stated:
“We are happy to announce our first battery storage transaction and first investment in Australia. This is an attractive opportunity for our investors and allows us to work with the Canigou team in growing both our portfolios in Australia. The investment will help build energy resiliency for local communities and support further growth in the deployment of renewables.”
Closing of the transaction is subject to the completion of due diligence to the satisfaction of the Company, execution of definitive transaction documentation, customary closing conditions and is expected to occur in early June 2021.
On Behalf of the Board of Directors,
About RE Royalties Ltd.
RE Royalties Ltd. acquires revenue-based royalties from renewable energy generation facilities by providing a non-dilutive financing solution to privately held and publicly traded renewable energy generation and development companies. The Company currently owns 83 royalties on solar, wind and hydro projects in Canada, Europe, and the United States. The Company’s business objectives are to provide shareholders with a strong growing yield, robust capital protection, high rate of growth through re-investment and a sustainable investment focus.
About Canigou Capital
Canigou Molonglo Bess Pty Ltd. is a wholly owned subsidiary of Canigou Capital Holdings Limited. Canigou Capital Holdings Limited is an asset manager and renewable energy development group headquartered in Hong Kong. They have subsidiaries in Hong Kong, the UK, Germany, France, Australia, and the USA with staff based in London, Frankfurt, Toulouse, Barcelona, Hong Kong, and representative offices in Sydney and Denver. The company has 1.3 GW of projects under development that span the full breadth of renewable energy from solar to biogas and they have an aim to nurture and develop projects from inception through to long term management for a variety of investors.
For further information, please contact:
Renmark Financial Communications Inc.
Daniel Gordon: firstname.lastname@example.org
Tel: (416) 644-2020 or (212) 812-7680
RE Royalties: Renewable Energy Royalties Talia Beckett: email@example.com Tel: (778) 374‐2000 www.reroyalties.com
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Forward Looking Statements
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