#Canada #Ontario #SolarBank #Battery Energy Storage

SolarBank's Financing Breakthrough for Battery Energy Storage Projects

In a significant development for the renewable energy sector, SolarBank Corporation has announced that its subsidiary has successfully secured a $3 million project financing loan from RE Royalties Ltd. This financing marks the company's strategic entry into the growing market of Battery Energy Storage Systems (BESS).

Project Overview

The funding will support the initial three BESS projects, each with a capacity of 4.99 MW, located in Ontario. These projects are spearheaded by 1000234763 Ontario Inc. and 1000234813 Ontario Inc., collectively known as ProjectCos. The central borrower under the loan agreement is Solar High Yield Projects #1 Ltd., a wholly-owned subsidiary of SolarBank.

This initiative is significant as the battery energy storage market is forecasted to expand at a compound annual growth rate of 16.3%, poised to reach an impressive $31.2 billion by 2029. Such market growth emphasizes the rising demand for renewable energy solutions that enhance grid reliability and promote sustainable electricity generation.

Financial Terms

The Loan, which bears an interest rate of 11% per annum, is scheduled for repayment by November 26, 2025. As part of the agreement, the company has granted a 0.40% royalty on gross revenues generated by the projects to the lender. However, should the loan be repaid within the initial six months, the royalty rate will reduce to 0.25%. This financing arrangement underscores SolarBank's commitment to fostering a diverse portfolio and advancing sustainability through innovative energy solutions.

Leadership Perspectives

Matthew Wayrynen, Chair of SolarBank, expressed his enthusiasm about the financing, stating, "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, echoed this sentiment, reiterating confidence in SolarBank's capabilities. He noted, "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."

Challenges and Risks

However, the company acknowledges that developing these projects comes with inherent risks. Approval from relevant authorities, continued access to third-party financing, and successful execution of construction plans are all critical elements that could impact project delivery. Moreover, shifts in government incentives for battery energy storage could create economic challenges for future undertakings.

As SolarBank progresses with this significant financing round, the focus remains on navigating these risks while capitalizing on the burgeoning demand for renewable energy solutions. The advancement of its project financing package speaks to its proactive approach toward ensuring the successful construction and operation of these innovative energy projects.

About SolarBank Corporation

SolarBank Corporation is an independent developer and owner of renewable and clean energy projects, focusing on distributed and community solar initiatives both in Canada and the USA. With a project development pipeline exceeding one gigawatt and established assets of over 100 megawatts, the company emphasizes financial returns through an extensive portfolio of diverse renewable energy projects. Their commitment to sustainability and innovation strengthens their position to meet the rising energy needs of the future while contributing to a cleaner planet. To learn more, visit www.solarbankcorp.com.