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RE Royalties Enters into a Letter of Intent for $10 Million Loan and Royalty on Battery Storage Project in Australia
All amounts in Canadian dollars unless otherwise stated NOT FOR DISTRIBUTION TO U.S. NE...
About this update from Re Royalties Ltd.
[{"type":"text","content":"RE Royalties Enters into a Letter of Intent for $10 Million Loan and Royalty on Battery Storage Project in AustraliaAll amounts in Canadian dollars unless otherwise statedNOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION TO THE UNITED STATESVANCOUVER, BC / ACCESSWIRE / March 29, 2021 / RE Royalties Ltd. (TSXV:RE) (\"RE Royalties\" or the \"Company\"), a global leader in renewable energy royalty-based financing, announced that it has entered into a letter of intent (\"Letter Agreement\") with Canigou Molonglo Bess Pty Ltd. (\"Canigou\"), to finance a 10MW battery storage project (\"Project\") located near Canberra, in the Australian Capital Territory (\"ACT\"), Australia. RE Royalties will provide a CAD $10 million loan (\"Loan\") to Canigou and acquire a gross margin royalty (\"Royalty\") for the life of the project. The proposed Loan will be a first-ranking senior secured amortized loan and will be for a period of 4 years. The Loan will bear interest at 10% per annum compounded monthly and the loan will be repaid based on project revenues. The Royalty will be a 20% royalty on gross margin (revenues less operating costs) during the period that the loan is being repaid and thereafter the Royalty rate will be reduced to 15% of gross margin for the remainder of the life of the project, estimated at up to 10 years.The ProjectCanigou will install two separate 5 MW batteries that will support the growth of renewables in the ACT area and provide electricity grid stabilization services and the potential for selling electricity in the wholesale electricity market. The Project will be installed in two stages, with the first battery installation planned to commence in June 2021 and be operational in November 2021. The second battery is planned to be installed and operational in the second half of 2022.Australia is currently seeing significant growth and demand for renewables and energy storage. This growth and demand are driven by recent electricity outage events, decommissioning of coal power, declining equipment prices, and open access to grid support service markets. The World Bank estimates that 23,000 to 45,000 GWh of batteries and storage will be needed across energy systems by 2050, compared to around 200 GWh today.Bernard Tan, CEO of the Company stated \"We are happy to announce our first battery storage transacti...