VANCOUVER, BC, Sept. 15,
2022 /CNW/ - Revolve Renewable Power Corp.
(TSXV: REVV) ("Revolve" or the "Company") is
pleased to announce that it has signed an energy services contract
for a new 3.2MWh ("megawatt per hour") Battery Energy Storage
System (or "BESS")(the "Project"). This is the first BESS project
signed under the Company's recently established distributed
generation (or "DG") business and complements the recently
completed acquisition of Centrica Business Systems (Mexico) (see News Release dated August 29, 2022
(https://money.tmx.com/en/quote/REVV/news/5305963835965510/Revolve_Acquires_100%_of_Centrica_Business_Solutions_with_Operating_Assets_and_Recurring_Revenue_Stream).
The Project increases the Company's DG capacity in operation and
under construction by 50% to approximately 9MWh.
Project Details
- The 3.2MWh battery storage system will be installed at the site
of a major hotel chain in Cancun,
Mexico.
- Revolve will be the owner of the Project with responsibility
for the financing, installation and operation of the BESS system.
- A 10-year Energy Services Agreement (or "ESA") has been signed
between the Company and the hotel operator for the provision of
peak shaving and other energy related services.
- Under the ESA agreement Revolve will receive an annual fixed
payment in addition to sharing the energy savings delivered by the
Project over the 10-year contract period.
- An Engineering Procurement Contract (or "EPC") has been signed
with Quartux Mexico S.A. de C.V. (or "Quartux"), a highly
experienced installer and operator of battery storage systems in
Mexico, to deliver a turnkey
solution for the installation and commissioning of the BESS
system.
- In addition to the EPC a 10-year Maintenance Agreement has also
been signed with Quartux for the day-to-day operation and
optimization of the system including all routine maintenance.
- The Project is targeted to be operational in Q1 2023 and will
add to the recurring revenue base established by the Company with
the recent acquisition of Centrica Business Solutions (Mexico). An updated financial forecast for the
Company's DG division is currently being completed and will be
released in due course.
- The project is expected to cost approximately US$1.8m to install and commission including all
related financing and transaction costs.
Project Financing
The Project will be financed through a combination of cash on
hand and a new CAD$1.86m secured loan
(the "Secured Loan") to be provided by RE Royalties Ltd (or "RER").
The financing agreements will consist of a secured loan
agreement and a royalty agreement between Revolve and RER.
Finalization of the financing agreements is expected to be
completed in the next few weeks.
The Secured Loan will be drawn down per a schedule commencing
upon signing of the definitive financing agreements and will have a
term of 24 months. It will be repayable at maturity, bear interest
at 12% on drawn funds, with interest payable on a quarterly basis
during the term. The Company will pay RE Royalties a financing fee
of 2% of the Secured Loan amount on signing. The Secured Loan will
be secured by certain assets of the Company. The Company will
also enter into a royalty agreement with RER under which RER will
receive a royalty of 5% on gross revenues generated by the Project
for the term of the ESA.
Mr. Eric Hickert, CEO of Revolve
Business Solutions, commented: "We are extremely pleased to sign
our first battery storage as a service deal and to add further
contracted capacity to our growing distributed generation business.
We are also particularly excited by the partnership with Quartux
and are looking forward to working with them on similar projects
over the coming months."
Mr. Alejandro Fajer, COO of
Quartux Mexico, S.A. de C.V. commented: "In Quartux we are very
happy to collaborate with Revolve in a strategic project that will
open the door to many opportunities and will further strengthen our
position as leaders in the energy storage sector in Mexico and LATAM."
Currency Considerations
All transactions over the course of this contract as well as the
Agreement with the installer will be in Mexican Pesos. For ease of
reference all dollar amounts have been presented in U.S. dollars at
exchange rate of One Mexican Peso (MX$) to 0.05 US dollars (US$).
What is Distributed
Generation?
Distributed Generation (or "DG") is an approach to the
provision of energy by deploying tools, most commonly solar and
battery storage technologies, near end consumers of power.
The power generation and storage units are typically installed on
rooftops or near the power consumer and provide power direct to the
customer (often described as "behind the meter" power, as opposed
to purchasing electricity off the "grid").
The business model for Revolve entails installing power systems
at its own cost at customer premises and selling the renewable
energy produced from these systems back to its customers on
long-term Power Purchase Agreements or Energy Service Agreements.
The primary target market is large commercial and industrial
enterprises, including manufacturing operations and hotel
chains.
About Revolve
Revolve was formed in 2012 to capitalize on the growing global
demand for renewable power. Revolve develops utility-scale wind,
solar and battery storage projects in the US and Mexico with a portfolio of 3,700MW under
development. The Company has a second division, Revolve Renewable
Business Solutions which installs and operates sub 20MW "behind the
meter" distributed generation (or "DG") assets. Revolve Renewable
Business Solutions currently has an operating portfolio of 2.85MW
with an additional 3MW in the construction phase.
Revolve has an accomplished management team with a demonstrated
track record of taking projects from "greenfield" through to "ready
to build" (or "RTB") status and successfully concluding project
sales to large operators of utility-scale renewable energy
projects. To-date, Revolve has developed and sold over 300MW
of projects.
Going forward, Revolve is targeting 5,000MW of utility-scale
projects under development in the US and Mexico, and in parallel is rapidly growing its
portfolio of revenue-generating distributed generation assets.
Forward Looking
Information
Although Revolve believes, considering the experience of its
officers and directors, current conditions and expected future
developments and other factors that have been considered
appropriate that the expectations reflected in this forward-looking
information are reasonable, undue reliance should not be placed on
them because Revolve can give no assurance that they will prove to
be correct. When used in this press release, the words "estimate",
"project", "belief", "anticipate", "intend", "expect", "plan",
"predict", "may" or "should" and the negative of these words or
such variations thereon or comparable terminology are intended to
identify forward-looking statements and information. The
forward-looking statements and information in this press release
include information relating to the business plans of Revolve and
Revolve's management's expectation on the growth and performance of
its business in the United States
and Mexico, including the planned
MW capacity of its projects; its expansion into the distributed
generation market; potential opportunities in the distributed
generation market; the completion and timing of the
development of its planned portfolio of distributed generation
projects; the completion of the Transaction, including final
approval of the transaction by the TSXV; potential revenues and
cashflows generated from its DG division; and the Company's plans
to develop, construct and finance rooftop solar, battery storage
and energy efficiency projects of up to 5MW and enter into
long term power purchase agreements for the sale of electricity
from the projects with the underlying customers. Such statements
and information reflect the current view of Revolve and/or Revolve,
respectively.
The forward-looking statements contained in this news release
are based on current expectations, estimates, projections and
assumptions, having regard to the Company's experience and its
perception of historical trends, and includes, but is not limited
to, expectations, estimates, projections and assumptions relating
to the extent of regulations pertaining to the Company's projects
and Revolve's ability to continue as going concern. Risks and
uncertainties that may cause actual results to differ materially
from those contemplated in those forward-looking statements and
information, including but not limited to: the effects of weather,
catastrophes and public health crises, including COVID-19; labour
availability; disruptions to the Company's supply chains; changes
to regulatory environment, including interpretation of production
tax credits; armed hostilities and geopolitical conflicts; failure
to obtain necessary regulatory approvals in a timely fashion, or at
all; risks related to the development and potential development of
the Company's projects; conclusions of economic evaluations;
changes in project parameters as plans continue to be refined; the
availability of tax incentives in connection with the development
of renewable energy projects and the sale of electrical energy; as
well as those factors discussed in the sections relating to risk
factors discussed in the Company's continuous disclosure filings on
SEDAR. Such statements and information reflect the current view of
Revolve. By their nature, forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause
our actual results, performance or achievements, or other future
events, to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements.
The forward-looking information contained in this press
release represents the expectations of Revolve as of the date of
this press release and, accordingly, is subject to change after
such date. Readers should not place undue importance on
forward-looking information and should not rely upon this
information as of any other date. Revolve does not undertake to
update this information at any particular time except as required
in accordance with applicable laws.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy
of this release.
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SOURCE ReVolve Renewable Power Corp