All amounts in Canadian dollars, unless otherwise indicated
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 projects of development of battery energy storage located in Ontario (the “Development Projects”).
Development projects will have a capacity of 21 MW, and Switch OpCo will receive revenue from several sources, the majority coming from energy service agreements (“ESAs”) with building owners. As part of ESAs, Switch OpCo may receive a percentage of the cost savings generated by the batteries, primarily by reducing charges as part of the Independent Electricity System Operator’s overall adjustment program.
Development Projects will be deployed with large real estate, asset management and industrial clients. It is estimated that the portfolio will offset nearly 1,170 tonnes of CO2 per year, which is equivalent to removing more than 250 gasoline-powered cars from the road. These energy storage systems will accelerate Ontario’s transition to a decentralized, carbon-free and resilient electricity grid. For customers, they will help reduce their carbon footprint while reducing costs and unlocking further savings through optimizing the use of electricity. Development projects should be operational between summer 2022 and summer 2023.
The second acquisition loan will have a term of 23 months and will bear an interest rate of 10% per year, compounded monthly and payable at the end of the term. The Company will also receive a sliding scale royalty of between 3.5% and 5% on the gross revenues generated by the development projects, once financed and constructed, for the life of the ESAs for an initial term of 10 to 15 years with extension options.
This loan is RE Royalties’ second transaction with Switch Power after the $ 2.3 million loan and royalty transaction concluded in early September for four operating projects totaling 2 MW.
Bernard Tan, CEO of the company, said: “This transaction provides RE Royalties with an excellent opportunity to continue working with Switch Power and to increase our exposure to the growing battery and energy storage market. Our company is happy to continue its 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 royalties based on revenues from renewable energy production facilities by providing a non-dilutive financing solution to private and listed companies producing and developing renewable energy. RE Royalties is the first to apply this proven business model to the renewable energy sector. The Company currently holds 87 royalties on solar, wind, storage and hydroelectric projects in Canada, Europe and the United States. The Company’s business objectives are to provide shareholders with strong and growing returns, strong capital protection, a high growth rate through reinvestment and a sustainable investment focus.
About Switch Power Corporation
Switch Power Corporation is an independent power developer and producer headquartered in Calgary, Alberta, focused on deploying capital into 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 680 MW pipeline, in various geographic, technology and customer segments, with an estimated capital deployment of $ 220 million over the next 24 months.
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