Altius Minerals Corp. says its subsidiary, Altius Renewable Royalties Corp. (ARR), has entered into an initial $35 million royalty financing agreement with Apex Clean Energy related to an extensive portfolio of wind and solar energy development projects located across North America.
Apex has commercialized over 5 GW of clean energy projects since its inception in 2009. Its current portfolio includes approximately 21 GW (12.5 GW wind, 8.5 GW solar) of development assets. The financing provided by ARR provides non-dilutive growth capital to Apex allowing it to accelerate the advancement of its development pipeline and to add additional projects to its portfolio.
Apex is committing its portfolio of renewable energy development projects to this new royalty investment structure with ARR, excluding certain later-stage portfolio projects that are already subject to sale, financing or construction commitments.
As individual projects from within the development portfolio reach commercial production, ARR will receive gross revenue royalties until such time as a sufficient number have been conveyed to meet a minimum royalty vesting threshold. Each individual project royalty, once created, will encompass the full life of the project including any extensions or enhancements that might occur. The agreement also includes mutual options to further expand the investment upon achievement of certain milestones related to the successful construction or sale of Apex projects.
“We are excited to begin supporting one of the most successful renewable energy development companies in the U.S. We believe that our investment represents an attractive new source of capital to help project originators in the renewables sector advance the projects that are needed to meet growing clean electricity demand,” says Brian Dalton, president and CEO of Altius.
“This transaction with Apex, our second with a U.S. developer, demonstrates that the benefits of our offering are being recognized and that our model is gaining adoption,” he adds.
The initial investment into Apex has been funded from Altius’ existing liquidity. Using current assumptions concerning development timeframes, output levels and realized power prices, the resulting ARR royalty portfolio is estimated to generate $3-4 million in new annual royalty revenues once the projects are operational and before factoring in the potential exercise of additional investment tranche options.
More information on the transaction and ARR can be found here.