$25.8 Million Royal Bank of Canada Project Finance Facility Secured by SolarBank

Press Release

TORONTO, Dec. 16, 2024 – SolarBank Corporation (NASDAQ: SUUN) (Cboe CA: SUNN) (FSE: GY2) (“SolarBank” or the “Company”) is pleased to announce its subsidiary has secured the financial closing of a combined project loan (“Loan”) in a principal amount of $25.8 million from Royal Bank of Canada as Lender, Administrative and Collateral Agent and Green Loan Structuring Agent (the “Lender” or “RBC”).

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 Ontario (the “Projects”), with project names SFF 06 and 903 respectively. The Projects are owned by 1000234763 Ontario Inc. (“ProjectCo”) and ProjectCo is the borrower under the terms of the Loan. The Projects represent SolarBank’s initial foray into battery energy storage, a market forecast by Fortune Business Insights to grow at a 16.3% compound annual growth rate from 2022 to reach US$31.2 billion by 20291. SolarBank’s interest in ProjectCo was acquired as part of the $45 million valued acquisition of Solar Flow-Through Funds Ltd. that closed in July 2024.

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 $1,221/MW per business day, significantly above the weighted average price of $876/MW for all storage category projects under the E-LT1 RFP. This underscores the competitive positioning of these projects in the Ontario energy storage market. The Company expects that once operational each project will have 4.74 MW of daily contract capacity available (at a capacity payment to ProjectCo of $1,221/MW per business day) for 251 business days in a year.

Furthermore, the Projects are eligible for the Clean Technology Investment Tax Credit introduced in 2024. This refundable tax credit provides up to 30% reimbursement of eligible capital costs for new clean technology, significantly enhancing the economic returns of the projects. This aligns with SolarBank’s commitment to leveraging government incentives to accelerate the transition to renewable energy while optimizing financial performance.

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 $35 billion by 20301.

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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 $1.7 million in excess equity that has been contributed to develop Project SFF06 to date.

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 50% interest in ProjectCo, with the remaining 50% held by a partnership formed by First Nations communities in Ontario.

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 Canada and the USA. The Company develops solar, Battery Energy Storage System (BESS) and EV Charging projects that sell electricity to utilities, commercial, industrial, municipal and residential off-takers. The Company maximizes returns via a diverse portfolio of projects across multiple leading North America markets including projects with utilities, host off-takers, community solar, and virtual net metering projects. The Company has a potential development pipeline of over one gigawatt and has developed renewable and clean energy projects with a combined capacity of over 100 megawatts built. To learn more about SolarBank, please visit www.solarbankcorp.com.

For further information, please contact: SolarBank Corporation, Genny Nugent, Email: genny.nugent@solarbankcorp.com, Phone: 416.494.9559; CoreIR Investor Relations, Peter Seltzberg, Email: peters@coreir.com, Phone: 516.222.2560

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