Fireside Chat with CEO Bernard Tan Discusses Strong Growth, Special Recognitions, and Opportunities Ahead
CEO Bernard Tan recently joined WTR CEO & Co-Founder Shawn Severson for a fireside chat. Mr. Tan discussed the company’s history, development, major landmarks over the last few years, and future opportunities. This report contains a transcript of the conversation, which can be accessed on demand. A link is accessible in our full report. RER is one of the first movers to leverage the royalty financing model and apply it to the renewable energy sector. Royalty financing allows renewable energy project owners to raise non-dilutive capital to fund their growth plans when traditional options are not available or suitable. RER offers capital in exchange for a percentage of future revenues from operating projects. Because the royalties are generally calculated based on revenue, this helps to shelter the company from inflationary pressures, according to Mr. Tan. RER started out in solar, wind, and hydro and eventually expanded into renewable natural gas, energy storage, and investing in efficiency. Energy storage is now the second-largest technology group in the portfolio. RER is now considering investing in EV charging with a developer that has pivoted outside of its historical line of business into EV charging. In the time since the company’s IPO in 2018, RE Royalties achieved a 63% CAGR in revenue through to 2023. The portfolio stood at 115 royalties at the end of 2023 and with investments equal to $72 million. Mr. Tan believes RER’s principle of delivering a strong yield, high growth, and impact resonates with investors. Mr. Tan said the portfolio investments the company has made have historically generated about a 19% unlevered IRR. RE Royalties has paid more than $6 million in dividends and $4.7 million in interest on green bonds since 2019. Mr. Tan highlighted that RER has received recognition from S&P Global Shades of Green. The company’s green bonds have been classified as dark green. According to Mr. Tan, in the world of ESG, this certification is the equivalent of a AAA rating impact and therefore something the company is very proud of. Also, over the last five years, members of the RE Royalties team won Canada’s Clean50 two times. The Clean50 is the national award offered to Canada’s leaders in sustainability. Additionally, the Globe & Mail, which is one of the leading publications in Canada, recognized the company as one of Canada’s top growing companies. RER has roughly $12 million in cash, and according to Mr. Tan, if the company executes on one to two of the opportunities from its pipeline, the company will likely need to raise some capital. Mr. Tan said an equity offering is not likely at the current share price, and that the green bond market has been a very good source of non-dilutive capital.
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