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RE Royalties Provides CAD $4.3 Million Secured Loan to Switch Power for Five Battery Storage Projects
All amounts in Canadian dollars unless otherwise stated VANCOUVER, BC / ACCESSWIRE / Nov...
About this update from Re Royalties Ltd.
[{"type":"text","content":"RE Royalties Provides CAD $4.3 Million Secured Loan to Switch Power for Five Battery Storage ProjectsAll amounts in Canadian dollars unless otherwise statedVANCOUVER, BC / ACCESSWIRE / November 8, 2021 / RE Royalties Ltd. (TSXV:RE) (\"RE Royalties\" or the \"Company\"), a global leader in renewable energy royalty-based financing, has entered into an equipment procurement loan agreement with Switch Power Ontario Battery Operations Corp. (\"Switch OpCo\"), a wholly owned subsidiary of Switch Power Corporation (\"Switch Power\"), for $4.3 Million (the \"EP Loan\").The EP Loan will allow Switch OpCo to procure Battery Energy Storage Systems (\"BESS\") for five projects owned by Switch OpCo (the \"2022 Projects\"), located in Ontario. The EP loan is RE Royalties' third transaction with Switch Power following the previously announced $2.3 million Acquisition Loan and $0.8 million Development Acquisition Loan, which were used by Switch Power to acquire the portfolio of 4 operating and 10 development energy storage projects located in Ontario and will be used to fund the first 5 development projects.The 2022 Projects will have a total storage capacity of 3.5MW and are expected to reach commercial operations in the summer of 2022. The 2022 Projects are located adjacent to existing buildings owned by large industrial and financial institutions, 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 will receive a percentage of the cost savings generated by the BESS systems, primarily through reducing the charges related to Global Adjustment, under the Independent Electricity System Operator's Industrial Conservation Program.The EP Loan will be provided in two draws: $2.8 million at closing, and the remaining $1.5 million in March 2022. The EP Loan will have a term of 24 months and will be repayable at maturity, bear interest at 8.6% on drawn funds, with interest payable during the term. The Company will also receive a sliding scale royalty of between 3% to 5% on gross revenues generated by the 2022 Projects for the life of the ESAs, for a 10-to-15-year initial term, with options to extend.Bernard Tan, CEO of RE Royalties, commented, \"We are very pleased to grow our relationship with Switch Power with this third tr...