Capacity: 40 MW
Location: Nova Scotia
Operational: 2014
Estimated Annual Generation: 144.3 GWh
Total Projects: 12
Background:
Scotian WindFields Inc. ("SWFI") is a renewable energy company based in Halifax that owns a minority interest in a portfolio of 12 wind energy projects located across Nova Scotia. Each project has a 20-year Power Purchase Agreement ("PPA") from Nova Scotia Power Incorporated ("NSPI").
In order to fund their portion of commitments during the development and construction of the portfolio, SWFI borrowed capital from their majority partner in the form of a loan.
The Problem:
The loan SWFI had been provided from their majority partner was coming due and they did not have the funds to repay it. If SWFI failed to pay back the loan, they risked losing their ownership in the portfolio.
As a small holding company with limited resources, SWFI’s options for refinancing were limited. The existing loan also had very restrictive covenants that made it difficult for SWFI to make any distributions to its shareholders.
SWFI needed a flexible way to re-finance their loan in the time they had.
Our Solution:
The combination of a short-term loan and a long-term royalty purchase provided a unique financing structure that allowed SWFI to avoid the possibility of losing their ownership in the wind portfolio, while also laying out a path to be able to make distributions to its shareholders.
We provided SWFI with a $3.3 million interest-bearing loan for 3 years that allowed them to refinance their debt owed to WEB Wind Energy. As part of the transaction, in addition to interest and principal payments on the loan, RE Royalties also receives royalty payments. These royalty payments come from revenues attributable to SWFI from all 12 wind projects and last for the life of each individual power purchase agreement.
Learn more about Scotian Windfields here:
Website: www.scotianwindfields.ca
Social Media: Linkedin - Scotian WindFields Inc.
RE Royalties' royalty financing solutions are designed to provide renewable energy operators and developers with the financial flexibility to grow without resorting to dilution, asset sales or restrictive debt covenants. Learn more about our project financing options here.