Altius Renewable Royalties Announces US $ 35 Million Funding with Longroad Energy

ST. JOHN’S, Newfoundland – (COMMERCIAL THREAD) – Altius Renewable Royalties (TSX: ARR) (“ARR”) reports that Great Bay Renewables (“Great Bay”), its subsidiary jointly controlled with funds managed by companies affiliated with Apollo Global Management (the “Apollo Funds” ), has closed a US $ 35 million royalty investment with Longroad Energy (“Longroad”) related to Longroad’s 331 MWdp (250 MWac) Prospero 2 solar project located in Andrews County, Texas (“Prospero 2 ”).

Longroad is a leading developer, owner and operator of renewable energy projects, having developed over 60 renewable energy projects totaling over 6 GW in North America. The project reached commercial operation on August 2, 2021 and is operated by Longroad. The solar installation is located on land leased from the University of Texas under a long-term rental agreement. More than two-thirds of the expected electricity production from Prospero 2 is subcontracted to two companies, Davita and Zimmer Biomet, under conditional power purchase agreements lasting fifteen years, the rest of the energy output of the project to be sold on the ERCOT spot market. .

The royalty investment has been structured using royalty rates that vary over time, which helps meet Great Bay’s investment barriers while optimizing the cash flow profile at the project level. Longroad. Great Bay expects to achieve an 8-12% return on its investment over the initial life of the project, with royalty revenues starting at a lower level from January 2022 and increasing significantly after the first five years. operating for the remainder of the life of the project.

Brian Dalton, CEO of ARR, said: “The ARR joint venture operations team at GBR has once again brought innovation to finance the growing US renewable energy industry. By providing partner-type financing directly into the capital structure of an operating project, in addition to the growth experienced by the existing platform of portfolio-based investments in early stage projects, we demonstrate clearly that our royalty funding structures are accepted and adopted in the renewable energy sector. As a result, we are more encouraged than ever about the possibilities for successful deployment of capital. ”

Frank Getman, CEO of Great Bay, commented: “We are delighted to invest in such a quality project that has been developed, built and now owned and operated by one of the strongest teams in the business. We value this new relationship with Longroad and look forward to supporting Longroad in its goal of responsibly developing, owning and operating renewable energy projects as part of the transition to a clean energy future. Getman added, “This is our first royalty investment directly into an operating project, demonstrating the growing adoption of our partner-type financing and significantly expanding the addressable market for our investment product of. Royalties. ”

“Longroad is delighted to add this innovative product to our capital structure,” said Pete Keel, Chief Financial Officer of Longroad. “Great Bay’s royalty investment is a perfect fit for Prospero 2 and further enables Longroad to grow our operating fleet, which today stands at over 1.5 GW of net ownership. We look forward to working with Great Bay again in the future.

Apollo financing and investment structuring

ARR and the Apollo funds have agreed to finance the Longroad investment with 70% of the capital provided by the Apollo funds and the balance of US $ 11 million to be financed directly by ARR. After the close, the Apollo funds will have funded a total of $ 59 million, of which approximately $ 48 million counts towards the initial commitment of $ 80 million from the Apollo funds. The balance of US $ 32 million is expected to be funded by the end of 2021. Upon completion of the Apollo fund acquisition, the joint venture partners will fund new opportunities on an equal basis.

Additional information regarding the Prospero 2 project, including a material change report filed on SEDAR, is available at energy stop.

About the ARR

ARR is a newly formed renewable energy company engaged in providing long-term royalty-level investment capital to renewable energy developers, operators and initiators through its Great Bay Renewables joint venture. The Company combines industry expertise with innovative and partner-driven solutions to foster the growth of the renewable energy sector as it fulfills its critical role in enabling the global energy transition.

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