SolarBank BESS Subsidiary Secures Project Financing
Press Release
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
Toronto, Ontario, November 27, 2024 — SolarBank Corporation (NASDAQ: SUUN; Cboe CA: SUNN, FSE: GY2) (“SolarBank” or the “Company”) is pleased to announce its subsidiary has secured project financing in the form of a loan (“Loan”) in a principal amount of $3 million from RE Royalties Ltd. (the “Lender”). The Projects (defined below) 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 ProjectCos was acquired as part of the $45 million valued acquisition of Solar Flow-Through Funds Ltd. that closed in July 2024.
The Company is developing three 4.99 MW Battery Energy Storage System (“BESS”) projects located in Ontario (the “Projects”). The Projects are owned by 1000234763 Ontario Inc. and 1000234813 Ontario Inc. (“ProjectCos”). Solar High Yield Projects #1 Ltd. (“the Borrower”) is the borrower under the terms of the Loan.
Matthew Wayrynen, Chair of SolarBank stated: “We are thrilled to continue our partnership with RE Royalties to secure this financing for our BESS projects in Ontario. Having worked with RE Royalties on previous projects, we value their expertise and shared commitment to sustainability. This financing is a key step toward a cleaner future and the further diversification of SolarBank’s growing project portfolio.”
Bernard Tan, CEO of RE Royalties, stated: “We are excited to be working with the SolarBank management team again on this transaction. The SolarBank team has a long proven track record in developing, building and operating renewable energy assets in North America. These BESS projects will help the province of Ontario support renewable electricity generation, build resiliency in the grid, and help lower emissions compared to conventional sources.”
The Loan will be advanced in a single installment and has a maturity date of November 26, 2025. The Loan bears interest at a rate of 11% per annum. As a condition of the Loan a 0.40% royalty on the gross revenues generated by the Projects has been granted to the Lender. The royalty rate shall be reduced to 0.25% if the Loan is repaid within the first six months. The Loan is secured by a first ranking security interest over all assets of the Borrower, except for its shares in the capital of theProjectCos. The Borrower is a wholly-owned subsidiary of the Company. The Borrower has an indirect 50% interest in ProjectCos, with the remaining 50% held by a partnership formed by First Nations communities in Ontario. The Loan is for incurred development and construction costs for the Projects and the Company continues to advance a project financing package for the full construction costs of the Projects.
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 and the risks associated with the construction of a battery energy storage project. 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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