RE Royalties Enters into Additional CAD $0.8 Million Loan Agreement with Switch Power for Energy Storage Projects in Ontario
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All amounts in Canadian dollars unless otherwise stated
VANCOUVER, BC / ACCESSWIRE / October 5, 2021 / RE Royalties Ltd. (TSXV:RE) ("RE Royalties" or the "Company"), a global leader in renewable energy royalty-based financing, has entered into a second loan agreement with Switch Power Ontario Battery Operations Corp. ("Switch OpCo"), a wholly owned subsidiary of Switch Power Corporation ("Switch Power"), for $786,750 (the "Second Acquisition Loan") to finance the purchase of a portfolio of ten battery energy storage development projects located in Ontario (the "Development Projects").
The Development Projects will have a capacity of 21 MW, and Switch OpCo will receive revenue from several sources, with the majority coming from Energy Services Agreements ("ESAs") with the building owners. Under the ESAs Switch OpCo may receive a percentage of the cost savings generated by the batteries, primarily through reducing the charges under the Independent Electricity System Operator's Global Adjustment program.
The Development Projects will be deployed with large real-estate, asset management, and industrial customers. It is estimated the portfolio will offset nearly 1,170 tonnes of CO2 per year, equivalent to taking over 250 gas-powered cars off the road. These energy storage systems will accelerate Ontario's transition to a decentralized, decarbonized, and resilient electricity grid. For customers, they will help reduce their carbon footprint while lowering costs and unlocking new cost savings through electricity use optimization. The Development Projects are expected to be operational between the summer of 2022 and the summer of 2023.
The Second Acquisition Loan will have a term of 23 months and bear an interest rate of 10% per annum, compounded monthly, and payable at the end of the term. The Company will also receive a sliding scale royalty of between 3.5% to 5% on gross revenues generated by the Development Projects, once funded and constructed, for the life of the ESAs for a 10-15 year initial term with options to extend.
This loan is RE Royalties' second transaction with Switch Power following on the $2.3 Million loan and royalty transaction completed in early September for four operating projects totalling 2 MW.
Bernard Tan, CEO of the Company stated "This transaction offers RE Royalties an excellent opportunity to continue to work with Switch Power and to increase our exposure to the growing battery and energy storage market. Our company is pleased to continue our relationship with Switch Power, and we look forward to working on more opportunities together in the future."
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.
About Switch Power Corporation
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.
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Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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.
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