Altius Renewable Royalties Announces New US$45MM Financing of U.S. Solar, Solar Plus Battery Storage
Altius Renewable Royalties Corporation (ARR:CA) ("ARR") (TSX: ARR, OTCQX: ATRWF) has recently made an exciting announcement regarding its jointly controlled subsidiary, Great Bay Renewables LLC ("Great Bay"). The subsidiary has entered into a transaction with Hexagon Energy, LLC ("Hexagon"), a U.S. renewable energy developer, to secure future royalties related to Hexagon's impressive portfolio of solar, solar plus battery storage, and standalone battery storage development projects. The joint venture between Great Bay and Hexagon aims to accelerate the growth of renewable energy in the United States.
Hexagon, headquartered in Charlottesville, Virginia, has a portfolio of 43 development projects with a total capacity of 5.3 GWac. These projects span across 12 states and four regional transmission organizations, with the possibility of additional projects being included in the portfolio in the future. Great Bay's new royalty investment structure will enable them to receive royalties from all projects developed and vended by Hexagon until a minimum target return threshold is met.
Under the transaction terms, Great Bay will invest a total of US$45 million in tranches over the next three years. An initial investment of US$15 million will be made upon closing. As individual pipeline projects are developed, Great Bay will receive a 2.5% gross revenue royalty on each solar and solar plus storage project and a 1.0% gross revenue royalty on each standalone storage project. These royalties will continue until the target minimum total return threshold is achieved. Royalties will be in effect for the entire lifespan of solar and solar plus storage projects, and for seven years on standalone storage projects. Great Bay expects that royalties from standalone storage projects will contribute less than 5% of the total value received on its investment. Additionally, Great Bay has the option to receive a portion of the cash proceeds from project sales, which would count towards the target return. There is also a future opportunity for Great Bay to invest an additional US$10 million into Hexagon as royalty financing.
Frank Getman, CEO of Great Bay, expressed enthusiasm about the partnership with Hexagon, highlighting Hexagon's successful track record. Getman stated, "Our financing program has helped create significant entity value for our other development partners, and we are confident that our flexible, partner-like capital, coupled with Hexagon's attractive portfolio and experienced team, will again result in a winning formula."
Matt Hantzmon, Founder and CEO of Hexagon Energy, praised the development team's achievements over the past seven years, building a world-class pipeline of over 5 GW. Hantzmon also mentioned the positive impact of the Investment Tax Credit (ITC) and the support from the Great Bay development facility in driving growth and expanding Hexagon's geographic reach.
Altius Renewable Royalties Corporation (ARR) is a renewable energy royalty company that provides long-term, royalty-level investment capital to renewable power developers, operators, and originators. ARR currently holds 10 renewable energy royalties, representing 2,068 MW of renewable power in operating projects, with an additional 6.0 GW in projects under construction and development across various regional power pools in the U.S. In addition to Hexagon Energy, ARR expects future royalties from investments made by Great Bay Renewables
in Bluestar Energy Capital, Hodson Energy, and Hexagon Energy. With a focus on partner-centric solutions, ARR aims to further the growth of the renewable energy sector as it plays a critical role in enabling the global energy transition.
*Investment Disclaimer: The information provided in this blog post is for informational purposes only and should not be considered as financial advice or a recommendation to invest. Investing in renewable energy projects or any other form of investment involves risks, and individuals should conduct their own research and consult with a qualified financial advisor before making any investment decisions.*