Longroad secures royalty investment for 250 MW solar farm in Texas
Aug 4 (Renewables Now) – An entity related to Altius Renewable Royalties Corp (TSE: ARR) has provided a $ 35 million (€ 29.6 million) royalty investment to US renewable energy developer Longroad Energy Holdings LLC for its 250 MW which has just been commissioned Prospero 2 solar park in Texas.
The company, which is a majority-owned subsidiary of Canada’s Altius Minerals Corporation (TSE: ALS), said on Tuesday the deal was structured using royalty rates that vary over time. The investment was made through Great Bay Renewables, a subsidiary that Altius Renewables jointly controls with funds managed by subsidiaries of Apollo Global Management.
Great Bay is expected to earn an 8% to 12% return on its investment over the initial life of the project. The royalty income will start to accumulate in January 2022 and will increase after the first five years of operation of the solar park.
Prospero 2, with a direct current (DC) capacity of 331 MW, was commissioned in early August. Installed on land leased from the University of Texas in Andrews County, the photovoltaic (PV) farm will operate under two 15-year power purchase agreements (PPAs) with the dialysis service provider Renal DaVita Inc and the medical device company Zimmer Biomet Holdings Inc. which is not contracted by the two companies will be sold on the ERCOT cash market.
Prospero 2 is located close to Longroad and AIP’s 379 MW DC Prospero 1 solar farm, which was commissioned in 2020.
(USD 1.0 = EUR 0.844)