USD $4.6 Million Loan and Fixed Royalty Agreement on RNG Project in Wisconsin
RE Royalties Enters into USD $4.6 Million Loan and Fixed Royalty Agreement on Renewable Natural Gas Project in Wisconsin
March 2, 2022, Vancouver, BC – RE Royalties Ltd. (TSX.V: RE) (“RE Royalties” or the “Company”), a global leader in renewable energy royalty-based financing, has entered into a mezzanine financing agreement with Outagamie Clean Energy Partners (“OCEP”), a Renewable Natural Gas (“RNG”) developer to finance the construction of a biogas to RNG upgrading project located in Wisconsin (the “Project”).
RE Royalties has provided a USD $4.6 million secured loan (the “Loan”) for three years. The Loan has an interest rate of 13.5% per annum. The Loan will be interest only for the first 2 years and amortized over the final year. RE Royalties will also receive a fixed annual royalty payment of 4% of invested capital for 10 years upon repayment of the Loan (the “Fixed Royalty Payment”). Franklin Park Infrastructure, a leading international renewable energy investor and asset manager, helped source and structure the Loan and will be a co-investor with RE Royalties.
The financing will enable OCEP to complete upgrades at an existing anaerobic digester facility located at a dairy farm near Green Bay, Wisconsin. The Project will take biogas produced from animal waste and upgrade this biogas to pipeline quality RNG for injection into the regional natural gas grid. The Project is located on an existing dairy farm, offering a constant, reliable source of feedstock.
The Project will receive revenue from multiple sources, with the primary sources being California Low Carbon Fuel Standard (“LCFS”) credits and US Environmental Protection Agency Renewable Identification Numbers (“RINs”). The Project has been producing biogas for 15 years and the Loan proceeds will be utilised to upgrade this biogas to RNG quality for injection into the natural gas grid.
This project reduces greenhouse gas emissions by capturing methane that would otherwise escape to the atmosphere and upgrading it for use as a transportation fuel. As methane is a powerful greenhouse gas (25 times the impact of CO2), the benefit is significant for each unit of gas produced. The project is expected to reduce emissions by more than 20,000 metric tonnes of CO2 equivalent per year.
Bernard Tan, CEO of the Company stated “We are pleased to make this investment in the renewable natural gas sector and to help finance a project that will bring a new source of revenue directly to farm owners. The ability to help reduce global greenhouse gas emissions and the ability to divert and utilize the gas in a productive and meaningful way is a win-win solution for the farmer, consumer, and environment. This transaction demonstrates the growing demand for our innovative royalty financing solutions and provides an attractive opportunity for our investors.”
Kevin Lapidus, the Chief Investment Officer for Franklin Park, commented, “We are pleased to expand the Franklin Park investment franchise to include renewable natural gas. We continue to look for new development companies to support with corporate equity, project development capital, tax equity and project ownership capital that enables developers to transform into asset owners and IPPs.”
On Behalf of the Board of Directors,
About Outagamie Clean Energy Partners
Outagamie Clean Energy Partners (“OCEP”) was formed as a Wisconsin limited liability company in 2006 to own and operate a landfill methane gas to electric power plant located at the Outagamie County Landfill in Appleton, Wisconsin. They have since moved into the dairy farm animal waste to RNG conversion business and currently operate an RNG facility located outside of Green Bay, Wisconsin.
About Franklin Park
Franklin Park develops, owns, and manages infrastructure assets. Franklin Park has a diverse portfolio, including renewable and conventional electricity generation, electric distribution, rail and road transport, and supply chain logistics. Franklin Park provides a full suite of capital for renewable energy development companies, including corporate equity, pre-NTP project development capital, tax equity and project acquisitions. Additional details can be found at www.frpark.com. Franklin Park Contact: Kevin Lapidus, Phone: (301) 500-8660, Email: Kevin.Lapidus@frpark.com
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. RE Royalties is the first to apply this proven business model to the renewable energy sector. The Company currently owns 99 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.
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 Ltd. Talia Beckett: email@example.com Tel: (778) 374‐2000 www.reroyalties.com
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