Funding will be used to develop and
construct two battery energy storage projects acquired as part of
the Solar Flow-Through Funds Ltd. acquisition.
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, Dec. 16,
2024 /PRNewswire/ - 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.
______________________________
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.
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements and
forward-looking information within the meaning of Canadian
securities legislation (collectively, "forward-looking
statements") that relate to the Company's current expectations and
views of future events. Any statements that express, or involve
discussions as to, expectations, beliefs, plans, objectives,
assumptions or future events or performance (often, but not always,
through the use of words or phrases such as "will likely result",
"are expected to", "expects", "will continue", "is anticipated",
"anticipates", "believes", "estimated", "intends", "plans",
"forecast", "projection", "strategy", "objective" and "outlook")
are not historical facts and may be forward-looking statements and
may involve estimates, assumptions and uncertainties which could
cause actual results or outcomes to differ materially from those
expressed in such forward-looking statements. In particular and
without limitation, this news release contains forward-looking
statements pertaining to the Company's expectations regarding its
industry trends and overall market growth; the terms of the Loan;
the use of proceeds from the Loan and draw downs under the Loan;
the Company's growth strategies the expected energy production from
the Projects mentioned in this press release; the timeline for
construction of the Projects; the receipt of permits and financing
to be able to construct the Projects; the receipt of incentives for
the Projects; and the size of the Company's development pipeline.
No assurance can be given that these expectations will prove to be
correct and such forward-looking statements included in this news
release should not be unduly relied upon. These statements speak
only as of the date of this news release.
Forward-looking statements are based on certain assumptions and
analyses made by the Company in light of the experience and
perception of historical trends, current conditions and expected
future developments and other factors it believes are appropriate,
and are subject to risks and uncertainties. In making the forward
looking statements included in this news release, the Company has
made various material assumptions, including but not limited to:
obtaining the necessary regulatory approvals; that regulatory
requirements will be maintained; general business and economic
conditions; the Company's ability to successfully execute its plans
and intentions; the availability of financing on reasonable terms;
the Company's ability to attract and retain skilled staff; market
competition; the products and services offered by the Company's
competitors; that the Company's current good relationships with its
service providers and other third parties will be maintained; and
government subsidies and funding for renewable energy will continue
as currently contemplated. Although the Company believes that the
assumptions underlying these statements are reasonable, they may
prove to be incorrect, and the Company cannot assure that actual
results will be consistent with these forward-looking statements.
Given these risks, uncertainties and assumptions, investors should
not place undue reliance on these forward-looking statements.
Whether actual results, performance or achievements will conform
to the Company's expectations and predictions is subject to a
number of known and unknown risks, uncertainties, assumptions and
other factors, including those listed under "Forward-Looking
Statements" and "Risk Factors" in the Company's most recently
completed Annual Information Form, and other public filings of
the Company, which include: the Company may be adversely affected
by volatile solar power market and industry conditions; the
execution of the Company's growth strategy depends upon the
continued availability of third-party financing arrangements; the
Company's future success depends partly on its ability to expand
the pipeline of its energy business in several key markets;
governments may revise, reduce or eliminate incentives and policy
support schemes for solar and battery storage power; general global
economic conditions may have an adverse impact on our operating
performance and results of operations; the Company's project
development and construction activities may not be successful;
developing and operating solar projects exposes the Company to
various risks; the Company faces a number of risks involving Power
Purchase Agreements ("PPAs") and project-level financing
arrangements; any changes to the laws, regulations and policies
that the Company is subject to may present technical, regulatory
and economic barriers to the purchase and use of solar power; the
markets in which the Company competes are highly competitive and
evolving quickly; an anti-circumvention investigation could
adversely affect the Company by potentially raising the prices of
key supplies for the construction of solar power projects; foreign
exchange rate fluctuations; a change in the Company's effective tax
rate can have a significant adverse impact on its business;
seasonal variations in demand linked to construction cycles and
weather conditions may influence the Company's results of
operations; the Company may be unable to generate sufficient cash
flows or have access to external financing; the Company may incur
substantial additional indebtedness in the future; the Company is
subject to risks from supply chain issues; risks related to
inflation; unexpected warranty expenses that may not be adequately
covered by the Company's insurance policies; if the Company is
unable to attract and retain key personnel, it may not be able to
compete effectively in the renewable energy market; there are a
limited number of purchasers of utility-scale quantities of
electricity; compliance with environmental laws and regulations can
be expensive; corporate responsibility may adversely impose
additional costs; the future impact of any resurgence of COVID-19
on the Company is unknown at this time; the Company has limited
insurance coverage; the Company will be reliant on information
technology systems and may be subject to damaging cyberattacks; the
Company may become subject to litigation; there is no guarantee on
how the Company will use its available funds; the Company will
continue to sell securities for cash to fund operations, capital
expansion, mergers and acquisitions that will dilute the current
shareholders; and future dilution as a result of financings.
The Company undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required
by law. New factors emerge from time to time, and it is not
possible for the Company to predict all of them, or assess the
impact of each such factor or the extent to which any factor, or
combination of factors, may cause results to differ materially
from those contained in any forward-looking statement. Any
forward-looking statements contained in this news release are
expressly qualified in their entirety by this cautionary
statement.
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SOURCE SolarBank Corporation