Solar project in Texas Prospero 2, operated by Longroad Energy, has received a $35 million investment from Altius Renewable Royalties; and its subsidiary Great Bay Renewables. The capital investment company announced this Tuesday.
Firstly, Altius Renewable Royalties, and subsidiary Great Bay Renewables invested the $35 million in the form of a royalty investment; it has been structured using royalty rates that vary over time; which achieve Great Bay’s investment hurdles while optimizing Longroad’s project level cash flow profile.
Secondly, Great Bay expects to earn a return of 8 to 12% on its investment over the initial life of the project; with royalty revenue starting at a lower level in January 2022; and increasing materially after the first five years of operation, and for the remainder of the project’s life.
Thirdly, as Great Bay Renewables is managed with funds by affiliates of Apollo Global Management; also known as Apollo Funds; Altius and the Apollo Funds have agreed to fund the Longroad investment with 70% of the capital from the former; while the balance of US$11 million funded directly by the later.
Moreover, regarding the investment, Brian Dalton, CEO of Altius, said. “Altius and our team operating at Great Bay Renewables have once again brought innovation to the financing of the rapidly growing US renewable energy industry.”
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Solar project Prospero entered operations August 2
He also remarked. “By providing partner-like funding directly into the capital structure of an operating project; we are clearly demonstrating that our royalty financing structures are earning acceptance and also, adoption within the renewable energy sector.”
On the other hand, Frank Getman, CEO of Great Bay, commented. “We are excited to invest in such a high-quality project; developed, constructed and now also, owned and operated by one of the strongest teams in the sector.”
He also remarked. “This is our first royalty investment directly into an operating project; which speaks to the increasing adoption of our partner-like funding; and also, greatly expands the addressable market for our royalty investment product.”
Finally, the Prospero 2 project entered operation in August 2, 2021. Longroad Energy fully operates it. The project locates in Texas; and its power output is already sold to two companies, Davita and Zimmer Biomet, under fifteen-year, unit contingent Power Purchase Agreements.
