Altius Renewable Royalties Announces New US$45MM Financing of U.S. Solar, Solar Plus Battery Storage and Standalone Storage Developer With 5.3 GW Pipeline
06/21/2023 - 05:18 PM
ST. JOHN’S, Newfoundland and Labrador --(BUSINESS WIRE)--
Altius Renewable Royalties Corporation (“ARR”) (TSX: ARR, OTCQX: ATRWF) is pleased to announce that its jointly controlled subsidiary, Great Bay Renewables LLC (“Great Bay”), has entered into a transaction with U.S. renewable energy developer, Hexagon Energy, LLC (“Hexagon”), to gain future royalties related to Hexagon’s portfolio of solar, solar plus battery storage and standalone battery storage development projects. Great Bay is jointly controlled by ARR and certain Apollo-managed funds (NYSE: APO).
Hexagon, based in Charlottesville, Virginia , is committing its portfolio of 43 development projects totalling 5.3 GWac located across 12 states and four regional transmission organizations as well as any additional projects added to its portfolio in the future to this new royalty investment structure with Great Bay. Great Bay will receive a royalty on all projects developed and vended by Hexagon until a minimum target return threshold is achieved.
Transaction Terms
The US$45 million royalty investment into Hexagon will be invested in tranches over approximately the next three years as Hexagon achieves certain project advancement milestones, with an initial investment upon closing of US$15 million .
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. This will continue until the target minimum total return threshold is achieved. Once created, individual royalties will continue for the full life of the solar and solar plus storage projects, and for seven years on standalone storage projects. Great Bay anticipates that the royalties on the standalone storage projects will contribute less than 5% of the total value received by Great Bay on its investment. In addition to royalties, Great Bay has the option to receive a portion of the cash proceeds from project sales. Any cash Great Bay elects to receive under this option would count toward the target return.
As part of the transaction, Great Bay has the option to invest an additional US$10 million into Hexagon as royalty financing in the future.
Commenting on the new partnership with Hexagon, Frank Getman, CEO of Great Bay, said “Matt Hantzmon and Hexagon have an impressive track record of success. We are excited to add another high-quality developer to our developer royalty financing portfolio. 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.”
“Over the past 7 years Hexagon has built a world-class development team with a robust and growing pipeline over 5 GW,” said Matt Hantzmon, Founder and CEO of Hexagon Energy. “The passage of the IRA and support from the Great Bay development facility has created the predictability and incentives we need to aggressively invest and grow our team and development pipeline. Our partnership with Great Bay will also allow us to expand our geographic reach, currently focused on; PJM, MISO, ISO-NE, SERC, and ERCOT to add SPP, WECC, and CAISO projects to our growing project pipeline. The team at Great Bay has shown a keen understanding of development and ways to accelerate that. We look forward to working with the Great Bay team to scale Hexagon.”
Great Bay was advised on this transaction by an advisory team from CCA Capital LLC led by Martin Pasqualini and a legal team at Pierce Atwood LLP led by Kris Eimicke. Hexagon Energy was represented by a legal team at JWM Law, PLLC led by Cliff Moorman.
About ARR
ARR is a renewable energy royalty company whose business is to provide long-term, royalty-level investment capital to renewable power developers, operators, and originators. ARR currently has 10 renewable energy royalties representing 2,068 MW of renewable power on operating projects, and an additional approximately 6.0 GW on projects in the construction and development phases, across several regional power pools in the U.S. The Corporation also expects future royalties from GBR’s investments in Bluestar Energy Capital, Hodson Energy and Hexagon Energy. The Corporation combines industry expertise with innovative, partner-focused solutions to further the growth of the renewable energy sector as it fulfills its critical role in enabling the global energy transition.
Forward-looking information
This news release contains forward‐looking information. The statements are based on reasonable assumptions and expectations of management and ARR provides no assurance that actual events will meet management's expectations. In certain cases, forward‐looking information may be identified by such terms as "anticipates", "believes", "could", "estimates", "expects", "may", "shall", "will", or "would". Although ARR believes the expectations expressed in such forward‐looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those projected. Readers should not place undue reliance on forward-looking information. ARR does not undertake to update any forward-looking information contained herein except in accordance with securities regulation.
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F lora Wood, Corporate Secretary
Flora@arr.energy
Ben Lewis, CFO
Ben@arr.energy
Source: Altius Renewable Royalties Corporation
