All amounts in Canadian dollars unless otherwise stated
VANCOUVER, BC / ACCESSWIRE / September 8, 2021 / RE Royalties Ltd. (TSXV:RE) ("RE Royalties" or the "Company"), a global leader in renewable energy royalty-based financing, is pleased to announce that it has entered into a loan agreement with Switch Power Ontario Battery Operations Corp. ("Switch OpCo"), a wholly owned subsidiary of Switch Power Corporation ("Switch Power"), for a $2.3 million loan to finance the acquisition by Switch OpCo of a portfolio of four operational energy storage projects (1.97 MW/4.38 MWh total) (the "Operating Projects") located in Ontario. RE Royalties will receive a 5% royalty on all gross revenues received by the Operating Projects for the life of the Energy Services Agreements ("ESA"), which have initial terms of 10-12-years with options to extend.
The Operating Projects are located adjacent to commercial buildings owned by large property managers or REITs and utilize battery technologies from Tesla and Sungrow to significantly reduce their electricity costs by supplying power during periods of peak demand. Switch OpCo will receive revenue from several different sources, with the majority coming from ESAs with the building owners. Under the ESAs Switch OpCo may receive, depending on the project, between 70% and 75% of the cost savings generated by the batteries, primarily through reducing the charges under the Independent Electricity System Operator's Global Adjustment program.
The loan will have a term of 24 months and bear an interest rate of 10% per annum, compounded monthly, and payable at the end of the term.
Bernard Tan, CEO of the Company stated "This transaction offers RE Royalties an excellent opportunity to branch out into the Ontario battery storage market. Our company is proud to provide funding for the acquisition of the Operating Projects, and we are pleased to establish a relationship with Switch Power. We look forward to working with them in the future to create energy security and take climate action with the expansion of their energy storage portfolio."
Trevor White, President and CEO of Switch Power commented "This transaction is transformational for our growth into a new market and compliments our electricity as a service value proposition through energy storage, which has huge market potential. We have a growing pipeline of projects and are excited to scale the market and do so through acquiring cash flowing assets. RE Royalties non-dilutive and flexible financing has enabled us to step into this transaction and focus our capital on growth, and we're excited about the relationship."
Switch Power Corporation is a developer and Independent Power Producer headquartered in Calgary, Alberta, that focuses on capital deployment in long-term infrastructure assets in underserved geographic and customer segments. Switch Power develops, builds, owns, and operates bespoke sustainable power generation projects consisting of distributed energy resources, with inherent value propositions to customers. Switch Power currently has a pipeline of 680MWs, across varying geographical, technology, and customer segments, with an estimated capital deployment of $220M over the next 24 months.
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. RE Royalties is the first to apply this proven business model to the renewable energy sector. The Company currently owns 87 royalties on solar, wind, storage 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: [email protected]
Tel: (416) 644-2020 or (212) 812-7680
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This news release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction, nor shall there be any offer or sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities being offered have not been approved or disapproved by any regulatory authority nor has any such authority passed upon the accuracy or adequacy of the short form base shelf prospectus or the prospectus supplement. The offer and sale of the securities has not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold in the United States or to United States persons absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws.
Forward Looking Statements
This news release includes forward-looking information and forward-looking statements (collectively, "forward-looking information") with respect to the Company and within the meaning of Canadian securities laws. Forward looking information is typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. This information represents predictions and actual events or results may differ materially. Forward-looking information may relate to the Company's future outlook and anticipated events or results and may include statements regarding the Company's financial results, future financial position, expected growth of cash flows, business strategy, budgets, projected costs, projected capital expenditures, taxes, plans, objectives, industry trends and growth opportunities including financing. The reader is referred to the Company's most recent filings on SEDAR for a more complete discussion of all applicable risk factors and their potential effects, copies of which may be accessed through the Company's profile page at www.sedar.com.
SOURCE: RE Royalties Ltd.