Abraxas Power Corp. (TSX.V: RE, OTCQX: RROYF), a prominent player in the energy transition sector, has announced a strategic partnership with RE Royalties Ltd., a leader in renewable energy financing. This collaboration involves a secured loan facility of up to CAD $10 million aimed at supporting solar energy projects in the Maldives.
The agreement, formalized through Abraxas’s subsidiary Abraxas Power Maldinvest Ltd., will be executed in multiple tranches. The first tranche of approximately CAD $1.4 million was successfully closed on November 18, 2024, and is earmarked for the construction of two rooftop solar installations with a combined capacity of 0.77 MWDC. These projects will be situated at a hospital in Malé, the capital of the Maldives, and at an island resort located about 50 kilometers north of the capital. The solar installations are expected to significantly reduce reliance on diesel generators, leading to both cost savings and environmental benefits for the businesses involved.
The terms of the loan include an 18-month duration with an interest rate of 13% per annum on advanced funds, compounded monthly. Additionally, RE Royalties will collect a fee of CAD $200,000 at closing to cover legal and due diligence expenses. As part of the deal, RE Royalties will also receive a gross revenue royalty of 2.0% from the projects throughout the duration of their respective power purchase agreements (PPAs).
J. Colter Eadie, CEO of Abraxas, highlighted the significance of this investment as a catalyst for initiating the energy transition in the Maldives. He emphasized that this move aligns with the Maldivian government’s commitment to decarbonization under its Nationally Determined Contributions (NDC). The partnership facilitates the development of distributed generation portfolios focused on critical sectors like healthcare and tourism—industries that are vital to the Maldives’ economy.
Tourism alone accounts for 28% of the Maldives’ GDP and generates 60% of its foreign exchange income. The ability to achieve sustainability within this sector is crucial for maintaining its status as a premier global destination. Abraxas has identified opportunities to replace over 100 MW of fossil fuel capacity with renewable energy solutions at some of the world’s largest hotel brands.
In addition to this loan agreement, Abraxas has received a pioneering Special Economic Zone permit that allows it to develop an energy efficiency project aimed at replacing up to 50% of fossil-derived energy in Malé with entirely green energy sources. This initiative is set to become one of the largest ocean-floating solar installations globally, showcasing Abraxas’s innovative approach to facilitating energy transitions.
Bernard Tan, CEO of RE Royalties, expressed enthusiasm about entering this new market and collaborating with Abraxas once again. He noted that this transaction not only establishes RE Royalties’ presence in a new jurisdiction but also opens pathways for further capital deployment in renewable energy initiatives.
Abraxas Power Corp. has established itself as a leader in the effort to decarbonize challenging sectors, tackling both present and future obstacles in the energy transition landscape. The company boasts significant expertise in project financing and large-scale development across a range of disciplines, including renewable energy generation and energy storage solutions.9163
