All amounts in Canadian dollars unless otherwise stated.
TORONTO, Nov. 21, 2024 (GLOBE NEWSWIRE) -- Abraxas Power Corp. (“Abraxas”), a leading energy transition developer is pleased to announce its subsidiary Abraxas Power Maldinvest Ltd. has entered into a loan agreement with RE Royalties Ltd. (TSX.V: RE) (OTCQX: RROYF) (“RE Royalties”), a global leader in renewable energy royalty-based financing, to receive a secured loan facility of up to $10 Million (the “Loan”) to support the construction of solar projects in the Maldives.
The Loan will have multiple tranches, with the first tranche of approximately $1.4 Million that closed on November 18, 2024, to be used for construction of two rooftop solar projects (the “Projects”) with a combined generation capacity of 0.77 MWDC. Subsequent tranches will be used for the construction of additional solar projects in the Maldives and will be advanced if certain conditions are met, such as the completion of satisfactory due diligence and approval by RE Royalties’ board of directors.
The Projects are located at a hospital in Malé, the capital of the Maldives, and an island resort approximately 50km north of Malé. They will generate revenue from power purchase agreements (“PPAs”) with the co-located businesses. Currently, both businesses rely primarily on electricity produced by diesel generators. By entering into the PPAs, they are expected to save on operating expenses and significantly reduce the environmental impacts of their operations.
The first tranche of the Loan has an 18-month term and an interest rate of 13% per annum on advanced funds, compounded monthly. RE Royalties received an arrangement fee of $200,000 at closing to cover legal and due diligence expenses. RE Royalties will receive a gross revenue royalty of 2.0% on the Projects for the term of the PPAs.
J. Colter Eadie, CEO of Abraxas, commented: “This investment has been a significant catalyst for initiating the energy transition in the Maldives, aligning with Abraxas’ broader mandate from the Government of Maldives to decarbonize under its Nationally Determined Contributions (NDC) commitment. The RE Royalties investment facilitates the development of a distributed generation portfolio in the Maldives, focusing on decarbonizing critical economic sectors like healthcare and tourism.
Tourism accounts for 28% of the country's GDP and generates 60% of all foreign exchange income. The Maldives' ability to achieve its sustainability goals within the tourism industry will be vital for its ongoing success as one of the world’s premier destinations. Abraxas has identified a pipeline of over 100 MW of potential fossil fuel capacity that can be replaced with clean and renewable energy at some of the world's largest hotel brands.
Additionally, Abraxas has been granted a first-of-its-kind Special Economic Zone permit to develop an energy efficiency project, which will enable the government of the Maldives to replace up to 50% of its fossil-derived energy in the capital with 100% green energy. This project will be one of the largest ocean-floating solar installations in the world and demonstrates Abraxas’s capability to facilitate the global energy transition for governments and industries with unique and innovative solutions.
RE Royalties has played a crucial role in addressing these challenges, and we look forward to continuing our partnership with RE Royalties in the Maldives and other regions.”
Bernard Tan, CEO of RE Royalties, stated:
“This transaction allows RE Royalties to establish a foothold in a new jurisdiction with a clear pathway to deploy more capital. We are thrilled to be working with the management of Abraxas again and we look forward to collaborating with them in the future to further grow their portfolio of renewable energy projects.”
About Abraxas Power Corp.:
Abraxas Power is a pioneering energy transition developer focused on decarbonizing hard-to-abate sectors and creating value by solving the current and future challenges of the energy transition. Abraxas Power’s broad mandate allows it to see opportunities across technologies and geographies to transform the global energy industry. Our team has extensive experience in leading, financing, and solving the challenges associated with energy transition, and a proven track record of delivering complex, large-scale development projects across various disciplines, including renewable power and storage, hydrogen and ammonia production, industrial and precious metals, large-scale project construction, and operations at scale. The team possesses strong project finance and capital markets experience and has a history of creating value for shareholders, stakeholders, and the communities they live in. Abraxas has signed strategic partnerships with various global strategics and technology providers.
Abraxas has secured over US$9 billion in capital projects through competitive government awards over the past year in furtherance of the energy transition, including its marquis Exploits Valley Renewable Energy Corporation project in Newfoundland, Canada.
To learn more, visit www.abraxaspower.com.
About RE Royalties Ltd.
RE Royalties Ltd. acquires revenue-based royalties over renewable energy facilities and technologies by providing non-dilutive financing solutions to privately held and publicly traded companies in the renewable energy sector. RE Royalties is the first to apply this proven business model to the renewable energy sector. The Company currently owns over 100 royalties on solar, wind, battery storage, energy efficiency and renewable natural gas projects in Canada, the United States, Mexico, and Chile. The Company’s business objectives are to provide shareholders with a strong growing yield, robust capital protection, high rate of growth through re-investment and a sustainable investment focus.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange), nor any other regulatory body or securities exchange platform, accepts responsibility for the adequacy or accuracy of this release.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction, nor shall there be any offer or sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities being offered have not been approved or disapproved by any regulatory authority nor has any such authority passed upon the accuracy or adequacy of the short form base shelf prospectus or the prospectus supplement. The offer and sale of the securities has not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold in the United States or to United States persons absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws.
Forward Looking Statements
This news release includes forward-looking information and forward-looking statements (collectively, "forward-looking information") with respect to RE Royalties and within the meaning of Canadian securities laws. Forward looking information is typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate, and similar expressions, or are those, which, by their nature, refer to future events. This information represents predictions and actual events or results may differ materially. Forward-looking information may relate to RE Royalties’ future outlook and anticipated events or results and may include statements regarding RE Royalties’ financial results, future financial position, expected growth of cash flows, business strategy, budgets, projected costs, projected capital expenditures, taxes, plans, objectives, industry trends and growth opportunities including financing. The reader is referred to the RE Royalties’ most recent filings on SEDAR as well as other information filed with the OTC Markets for a more complete discussion of all applicable risk factors and their potential effects, copies of which may be accessed through RE Royalties’ profile page at www.sedar.com.
