RE Royalties

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Overview

RE Royalties Ltd. provide investors the ability to invest in a growing clean energy economy and to generate strong capital returns over the near-to-medium term and above-market yield over the long term.

The global renewable energy market is very large, with $280 billion invested in the sector in 2017 alone, and continues to grow rapidly.  RE Royalties utilizes its unique royalty financing model to invest into a portfolio of operating and/or shovel-ready renewable energy projects owned by small-to-medium sized renewable energy companies.  These projects are long-lived assets, with long-term cash flows generated by the sale of electricity to investment grade electricity buyers. Although these companies have great assets, they are underserved by traditional financiers due to their size.

RE Royalties is the first royalty financing company to focus on the renewable energy sector. The royalty financing model is well-proven and royalty financing companies have a longstanding history of success in other sectors such as mining, oil and gas, pharmaceuticals, consumer services and agriculture. RE Royalties saw the rapid emergence of the renewable energy sector as an untapped opportunity to apply this foundational model that allows renewable energy companies a more flexible way to grow.

RE Royalties acquires and manages a portfolio of royalties focused on five key principles: (i) clean energy generation, (ii) strong risk-adjusted returns, (iii) stable long-term yield, (iv) high growth potential and (v) robust risk mitigation practices. Under this model, RE Royalties acquires royalty rights from small-to-medium sized renewable energy companies in need of capital for their projects. The company aims to acquire royalties with an internal rate of return (IRR) on investment between 12%-15%. To date, the company’s portfolio of acquired royalties in Canada, Europe and the United States boasts an IRR of 34%.

Renewable energy demand continues to grow year over year due to its environmentally-friendly nature, low operating costs, reliability, long-life and vast inexhaustible energy supply. In recent years, technological improvements have made new renewable energy projects more efficient to the point where government subsidies are no longer needed, and the cost to produce electricity from renewables is now lower than the cost to produce electricity by burning fossil fuels. Global investment in renewable energy capacity increased to $280 billion in 2017, far higher than fossil fuel capacity, and since 2010, a total of $2.2 trillion has been invested in renewable energy generation capacity.

RE Royalties benefits from a seasoned management team with experience in the resource, finance and renewable energy sectors. The company’s founders, Bernard Tan, Marchand Snyman and Peter Leighton, have combined experience of over 60 years in the corporate finance, resource and renewable energy development.

Company Highlights

  • First mover in the renewable sector to provide royalty financing
  • Signed agreement to go public on TSXV via reverse takeover with Baetis Ventures
  • Focus on operational or shovel ready projects with long-term, predictable cash flow
  • Strong pipeline of royalty acquisitions in a growing global renewable energy market
  • Diversified portfolio of cash-flowing royalties from solar, wind and hydro projects

Royalty Financing to fund the Renewable Energy Revolution

RE Royalties seeks to transform the way renewable energy projects are financed. For renewable energy project owners, royalty financing provides an option that is more flexible than debt, and is less costly and less dilutive than equity financing. Royalty financing also allows renewable energy project owners to raise capital to fund their growth plans without having to sell their existing assets.

For investors, the royalty business model can create significant shareholder value through the acquisition of long-term sustainable royalty streams, strong capital protection, high reinvestment rates to drive growth, and low operating costs. The renewable energy royalties are:

  • Backed by long-term power purchase agreements from credit worthy utilities or strong merchant markets
  • Able to provide predictable, low volatility, future cash flows that will support a growing dividend
  • Diversified across technologies (hydro, wind, solar, geothermal and biomass)
  • Diversified globally across regulatory jurisdictions
  • Secured against a project developer or owners’ assets
  • Based on gross revenues

Renewable energy is a low cost, abundant and inexhaustible resource. As long as the sun is shining and the wind is blowing, royalties from renewable energy projects will be able to produce cash flow for investors.  

RE Royalties’ Business Model

Although royalty companies are an established and proven form of investment in other industry sectors, RE Royalties is a pioneer and first mover for this business model in the renewable energy sector. The company currently has ownership of royalties from 11 renewable energy projects in North America and Europe, and plans to grow this portfolio in the near future. As part of a diversified portfolio, these projects include solar parks, wind farms, and small scale hydro facilities. Additionally, the company is currently looking to expand into the Asian renewable energy market.

RE Royalties applies strict investment criteria in its royalty acquisition process. The transactions must provide sufficient collateral to secure the company’s investment, have a clear path to cash flow and generate enough margin to warrant a long-term royalty. Finally, the investment should generate risk-adjusted IRR above the company’s long-term financial targets.

RE Royalties’ targeted IRR for its investments ranges from 12% to 15%. The company’s existing portfolio of acquired royalties has an aggregate IRR of 34% with an average royalty life of 20 years. Additionally, RE Royalties anticipates it can enhance the rates of return for shareholders to a range of 22% to 25% by eventually issuing green bonds to add leverage to the company’s capital structure.

RE Royalties’ current portfolio of royalties includes the following:

  • 1 percent of the gross revenue from an operational 102 MW wind farm in Canada;
  • 1.2 percent of the gross revenue and a 10 percent equity interest in 332 MW of advanced stage solar projects in the US; and
  • 1.2 percent of the gross revenue on a 39MW portfolio of six fully operational projects in Europe, including hydro, solar and wind projects.

Growth potential

The company has identified and is in discussions to acquire an additional $100 million in potential royalty acquisition opportunities in Europe, North America and Asia. The targets include solar, wind and hydro projects. RE Royalties is in varying stages of negotiations with the projects’ owners, from initial due diligence to signed letters of intent.


For informational purposes only. Details for this offering may be found in the Offering Memorandum for this issuance.


 

Meet the Team
Bernard Tan
Chief Executive Officer
Peter Leighton
Chief Operating Officer
Bryce Anderson
Financial Analyst
Events
RE Royalties: Growing our Clean Energy Future - using innovative financing
Sep 25, 2018 12:00 PM
Zoom
The event is today !
RE Royalties: Growing our Clean Energy Future - using innovative financing
Jul 11, 2018 12:00 PM
Zoom
The event happened 2 months ago.
Updates

RE Royalties Ltd.

July 12, 2018

RE Royalties Webinar #1: Growing Our Clean Energy Future Using Innovative Financing

In case you missed the live version, click below to see a recording of our webinar "Growing Our Clean Energy Future Using Innovative Financing":



Bernard Tan and Peter Leighton, founders of RE Royalties Ltd., present an overview of how they are democratizing the ability for investors to participate in renewable energy. Topics covered: the size and the breadth of the market they are pursuing; the mechanics of how they provide growth, returns and security to investors; and several case studies of how applying the RE Royalty business model has allowed RE Royalty clients/partners to achieve greater success building renewable energy projects and reducing carbon emissions.

You can invest in RE Royalties online: www.frontfundr.com/Company/re_royalties.

For more information on the company please visit www.reroyalties.com.


Investors
59 total, 50 anonymous
Naryan Wong
Annelies Haussler
Documents
General Risks
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