$25.8 Million Royal Bank of Canada Project Finance Facility Secured by SolarBank
SolarBank (NASDAQ: SUUN) has secured a $25.8 million project loan from Royal Bank of Canada for two 4.99 MW Battery Energy Storage System projects in Ontario. The loan will fund construction, operation, and maintenance of projects SFF 06 and 903, owned by ProjectCo, in which SolarBank holds a 50% interest.
The projects, acquired through the $45 million Solar Flow-Through Funds acquisition in July 2024, have secured 22-year contracts with IESO at $1,221/MW per business day, above the weighted average of $876/MW. Each project will have 4.74 MW of daily contract capacity for 251 business days annually. The projects qualify for a 30% Clean Technology Investment Tax Credit on eligible capital costs.
SolarBank (NASDAQ: SUUN) ha ottenuto un prestito progettuale di 25,8 milioni di dollari dalla Royal Bank of Canada per due progetti di Sistemi di Accumulo Energetico a Batteria da 4,99 MW in Ontario. Il prestito finanzierà la costruzione, l'operazione e la manutenzione dei progetti SFF 06 e 903, di proprietà di ProjectCo, in cui SolarBank detiene una partecipazione del 50%.
I progetti, acquisiti attraverso l'acquisizione di 45 milioni di dollari dei Fondi di Flusso Solare a luglio 2024, hanno ottenuto contratti ventennali con IESO a 1.221 dollari/MW per giorno lavorativo, al di sopra della media ponderata di 876 dollari/MW. Ogni progetto avrà una capacità contrattuale giornaliera di 4,74 MW per 251 giorni lavorativi all'anno. I progetti si qualificano per un Credito d'Imposta per Investimenti in Tecnologie Pulite del 30% sui costi di capitale ammissibili.
SolarBank (NASDAQ: SUUN) ha conseguido un préstamo de proyecto de 25,8 millones de dólares de Royal Bank of Canada para dos proyectos de Sistemas de Almacenamiento de Energía de Batería de 4,99 MW en Ontario. El préstamo financiará la construcción, operación y mantenimiento de los proyectos SFF 06 y 903, de propiedad de ProjectCo, en los cuales SolarBank tiene un interés del 50%.
Los proyectos, adquiridos a través de la adquisición de 45 millones de dólares de Fondos de Flujo Solar en julio de 2024, han asegurado contratos de 22 años con IESO a 1.221 dólares/MW por día hábil, por encima del promedio ponderado de 876 dólares/MW. Cada proyecto tendrá una capacidad contractual diaria de 4,74 MW durante 251 días hábiles al año. Los proyectos califican para un Crédito Fiscal de Inversión en Tecnología Limpia del 30% sobre los costos de capital elegibles.
SolarBank (NASDAQ: SUUN)는 캐나다 로얄뱅크로부터 온타리오에서 4.99 MW 배터리 에너지 저장 시스템 프로젝트 두 개를 위한 2,580만 달러의 프로젝트 대출을 확보했습니다. 이 대출은 SolarBank가 50%의 지분을 보유하고 있는 ProjectCo 소유의 프로젝트 SFF 06 및 903의 건설, 운영 및 유지보수를 지원합니다.
이 프로젝트들은 2024년 7월 4,500만 달러의 태양광 투자 자금 인수를 통해 확보되었으며, IESO와의 계약으로 22년 동안 하루 1,221달러/MW의 요금을 보장받았습니다. 이는 876달러/MW의 가중 평균보다 높은 금액입니다. 각 프로젝트는 연간 251 영업일동안 하루 4.74 MW의 계약 용량을 가질 것입니다. 이 프로젝트들은 적격 자본 비용에 대해 30%의 청정 기술 투자 세액 공제를 받을 자격이 있습니다.
SolarBank (NASDAQ: SUUN) a obtenu un prêt de projet de 25,8 millions de dollars de la Banque Royale du Canada pour deux projets de Système de Stockage d'Énergie par Batterie de 4,99 MW en Ontario. Ce prêt financera la construction, l'exploitation et la maintenance des projets SFF 06 et 903, détenus par ProjectCo, dans lequel SolarBank détient une participation de 50 %.
Les projets, acquis grâce à l'acquisition de 45 millions de dollars de Fonds d'Investissement Solaire en juillet 2024, ont sécurisé des contrats de 22 ans avec l'IESO à 1.221 dollars/MW par jour ouvrable, ce qui est supérieur à la moyenne pondérée de 876 dollars/MW. Chaque projet aura une capacité contractuelle quotidienne de 4,74 MW pendant 251 jours ouvrables par an. Les projets sont éligibles à un Crédit d'Impôt pour les Investissements en Technologie Propre de 30 % sur les coûts en capital admissibles.
SolarBank (NASDAQ: SUUN) hat ein Projekt-Darlehen in Höhe von 25,8 Millionen Dollar von der Royal Bank of Canada für zwei Projekte von Batteriespeichersystemen mit einer Leistung von 4,99 MW in Ontario gesichert. Das Darlehen wird die Konstruktion, den Betrieb und die Wartung der Projekte SFF 06 und 903 finanzieren, die im Besitz von ProjectCo sind, an dem SolarBank eine 50%ige Beteiligung hält.
Die Projekte, die durch die Akquisition von Solar Flow-Through Funds im Juli 2024 für 45 Millionen Dollar erworben wurden, haben 22-jährige Verträge mit IESO zu einem Preis von 1.221 Dollar/MW pro Geschäftstag, was über dem gewichteten Durchschnitt von 876 Dollar/MW liegt. Jedes Projekt wird eine tägliche Vertragskapazität von 4,74 MW für 251 Geschäftstage pro Jahr haben. Die Projekte qualifizieren sich für einen Steuerkredit für Investitionen in saubere Technologien in Höhe von 30% auf die förderfähigen Investitionskosten.
- Secured $25.8 million non-recourse project financing from RBC
- 22-year contracts with IESO at premium rates ($1,221/MW vs. $876/MW average)
- Projects eligible for 30% Clean Technology Investment Tax Credit
- Expected $1.7 million return of excess equity from Project SFF06
- Construction not yet started, subject to development risks
- Battery capacity degradation risk over time
- Project success dependent on third-party financing and permits
Insights
The
The 50-50 partnership structure with First Nations communities and RBC's backing adds credibility to the project. This strategic move into the battery storage market, projected to reach
The two 4.99 MW BESS projects mark SolarBank's strategic entry into energy storage, capitalizing on Ontario's supportive regulatory environment. The secured capacity payments significantly exceed market averages, indicating strong project economics. The 22-year IESO contracts provide stable, long-term revenue visibility, while the daily contract capacity of 4.74 MW per project ensures reliable grid services. The Clean Technology Investment Tax Credit enhances project returns while reducing capital costs.
The partnership with First Nations communities demonstrates strong local stakeholder engagement, which is important for infrastructure project success. The non-recourse financing structure effectively manages risk while the phased construction approach allows for operational optimization.
Funding will be used to develop and construct two battery energy storage projects acquired as part of the Solar Flow-Through Funds Ltd. acquisition.
This news release constitutes a "designated news release" for the purposes of the Company's prospectus supplement dated May 23, 2024 to its short form base shelf prospectus dated May 2, 2023
The Loan, on a non-recourse basis, will be used for the construction, operation and maintenance of two 4.99 MW Battery Energy Storage System ("BESS") projects to be located in
In July 2023, the Projects were awarded contracts by the Independent Electricity System Operator ("IESO") under the Expedited Long-Term RFP (E-LT1 RFP). These contracts, which have a term of 22 years, include a fixed contract capacity payment of
Furthermore, the Projects are eligible for the Clean Technology Investment Tax Credit introduced in 2024. This refundable tax credit provides up to
Executed by RBC's Corporate Client Group Project and Infrastructure Finance team, the Loan is part of RBC's efforts to support client decarbonization efforts. As announced by RBC, the bank plans to triple lending for renewable energy across RBC Capital Markets and Commercial Banking and to grow RBC's overall low-carbon energy lending to
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1 RBC's low-carbon energy lending goal and exposures are measured on an authorized lending basis, to reflect our total lending commitment. Low-carbon energy activities include the construction, development, operation, acquisition, maintenance and connection of: renewable energy sources (e.g., solar, wind), other low-carbon energy sources (e.g., nuclear and hydrogen) as well as electricity transmission and distribution systems, energy storage devices (e.g., batteries) and efficiency improvements (e.g., smart grids). For details on the eligibility criteria refer to RBC's Sustainable Finance Framework. For power generation clients in Capital Markets that have more than one energy source, authorized lending exposure is allocated on a pro-rata basis as a share of generation type based on revenue or an available proxy.
SolarBank expects the ProjectCo will be able to receive a return of
The Loan will initially be advanced as a construction loan facility (the "Construction Facility"). The Construction Facility shall be converted into a term loan (the "Term Facility") following the commercial operation date ("COD") of each Project. The Loan also includes an ITC bridge facility (the "ITC Facility").
The Loan is available for draw down by ProjectCo based on its construction schedule for each of the Projects and the satisfaction of relevant conditions precedent. ProjectCo is expecting to commence construction on the SFF 06 project during the current quarter and on the 903 project during the second calendar quarter of 2025. The Loan is secured by a first ranking security interest over all assets of the ProjectCo.
The Company has an indirect
There are several risks associated with the development of the Projects. The development of any project is subject to required permits, the continued availability of third-party financing arrangements for the Company, the risks associated with the construction of a battery energy storage project and the degredation of battery storage capacity over time based on the number of discharge cycles. In addition, governments may revise, reduce or eliminate incentives and policy support schemes for battery energy storage, which could result in future projects no longer being economic. Please refer to "Forward-Looking Statements" for additional discussion of the assumptions and risk factors associated with the projects and statements made in this press release.
1 https://www.fortunebusinessinsights.com/industry-reports/battery-energy-storage-market-100489
About SolarBank Corporation
SolarBank Corporation is an independent renewable and clean energy project developer and owner focusing on distributed and community solar projects in
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements and forward-looking information within the meaning of Canadian securities legislation (collectively, "forward-looking statements") that relate to the Company's current expectations and views of future events. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as "will likely result", "are expected to", "expects", "will continue", "is anticipated", "anticipates", "believes", "estimated", "intends", "plans", "forecast", "projection", "strategy", "objective" and "outlook") are not historical facts and may be forward-looking statements and may involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in such forward-looking statements. In particular and without limitation, this news release contains forward-looking statements pertaining to the Company's expectations regarding its industry trends and overall market growth; the terms of the Loan; the use of proceeds from the Loan and draw downs under the Loan; the Company's growth strategies the expected energy production from the Projects mentioned in this press release; the timeline for construction of the Projects; the receipt of permits and financing to be able to construct the Projects; the receipt of incentives for the Projects; and the size of the Company's development pipeline. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These statements speak only as of the date of this news release.
Forward-looking statements are based on certain assumptions and analyses made by the Company in light of the experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate, and are subject to risks and uncertainties. In making the forward looking statements included in this news release, the Company has made various material assumptions, including but not limited to: obtaining the necessary regulatory approvals; that regulatory requirements will be maintained; general business and economic conditions; the Company's ability to successfully execute its plans and intentions; the availability of financing on reasonable terms; the Company's ability to attract and retain skilled staff; market competition; the products and services offered by the Company's competitors; that the Company's current good relationships with its service providers and other third parties will be maintained; and government subsidies and funding for renewable energy will continue as currently contemplated. Although the Company believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect, and the Company cannot assure that actual results will be consistent with these forward-looking statements. Given these risks, uncertainties and assumptions, investors should not place undue reliance on these forward-looking statements.
Whether actual results, performance or achievements will conform to the Company's expectations and predictions is subject to a number of known and unknown risks, uncertainties, assumptions and other factors, including those listed under "Forward-Looking Statements" and "Risk Factors" in the Company's most recently completed Annual Information Form, and other public filings of the Company, which include: the Company may be adversely affected by volatile solar power market and industry conditions; the execution of the Company's growth strategy depends upon the continued availability of third-party financing arrangements; the Company's future success depends partly on its ability to expand the pipeline of its energy business in several key markets; governments may revise, reduce or eliminate incentives and policy support schemes for solar and battery storage power; general global economic conditions may have an adverse impact on our operating performance and results of operations; the Company's project development and construction activities may not be successful; developing and operating solar projects exposes the Company to various risks; the Company faces a number of risks involving Power Purchase Agreements ("PPAs") and project-level financing arrangements; any changes to the laws, regulations and policies that the Company is subject to may present technical, regulatory and economic barriers to the purchase and use of solar power; the markets in which the Company competes are highly competitive and evolving quickly; an anti-circumvention investigation could adversely affect the Company by potentially raising the prices of key supplies for the construction of solar power projects; foreign exchange rate fluctuations; a change in the Company's effective tax rate can have a significant adverse impact on its business; seasonal variations in demand linked to construction cycles and weather conditions may influence the Company's results of operations; the Company may be unable to generate sufficient cash flows or have access to external financing; the Company may incur substantial additional indebtedness in the future; the Company is subject to risks from supply chain issues; risks related to inflation; unexpected warranty expenses that may not be adequately covered by the Company's insurance policies; if the Company is unable to attract and retain key personnel, it may not be able to compete effectively in the renewable energy market; there are a limited number of purchasers of utility-scale quantities of electricity; compliance with environmental laws and regulations can be expensive; corporate responsibility may adversely impose additional costs; the future impact of any resurgence of COVID-19 on the Company is unknown at this time; the Company has limited insurance coverage; the Company will be reliant on information technology systems and may be subject to damaging cyberattacks; the Company may become subject to litigation; there is no guarantee on how the Company will use its available funds; the Company will continue to sell securities for cash to fund operations, capital expansion, mergers and acquisitions that will dilute the current shareholders; and future dilution as a result of financings.
The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law. New factors emerge from time to time, and it is not possible for the Company to predict all of them, or assess the impact of each such factor or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Any forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement.
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SOURCE SolarBank Corporation
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