Polaris Renewable Energy announces acquisition transaction in Puerto Rico

Polaris Renewable Energy release

TORONTO, ON (October 29th 2024) – Polaris Renewable Energy Inc. (TSX:PIF) ("Polaris" or the “Company”), is pleased to announce that it has entered into an Equity Capital Contribution Agreement (“ECCA”) with respect to Punta Lima Wind Farm LLC (a wholly owned subsidiary of Santander Bank N.A. -“Santander”-).

The project is an operating onshore wind farm called Punta Lima Wind Farm (“PLWF” or the “Project”) with a nameplate capacity of 26.0 MW’s located in the Municipality of Naguabo, Puerto Rico. The Project was reconstructed and recommissioned by Santander and has a 20-year power purchase agreement (“PPA”) in place with Puerto Rico Electric Power Authority (PREPA) terminating in March 2044.

The transaction is being completed using a tax-equity structure which will result in Polaris becoming the manager and operator of the Project with a controlling equity interest and Santander retaining a tax equity interest in the Project. the transaction is subject to customary closing conditions, which principally consist of approval of the acquisition by local regulatory bodies as well as the execution of a corresponding LLC Agreement. It is expected that these conditions will take approximately 90 days to finalize. The total equity contribution of $20 million from Polaris will be subject to customary closing adjustments including working capital changes. Polaris intends to use cash on hand to fund the equity contribution. Santander Corporate & Investment Banking acted as sole financial advisor to Santander Bank N.A.

"This strategic acquisition further deploys Polaris capital into another jurisdiction while adding wind into our generation mix”, said Marc Murnaghan, President and CEO of Polaris. "We believe that this transaction provides attractive near-term returns to our shareholders as well as enhancing our growth opportunities significantly. This includes the use of energy storage to provide competitively priced energy and grid stabilization services as well as exploring further strategic opportunities on the island given its stated future energy requirements."

“Santander is proud to have rebuilt the Punta Lima wind farm in Puerto Rico and is very pleased to be selling its interest to a specialist partner in Polaris,” said Nuno Andrade, head of Global Debt Financing US, Santander Corporate & Investment Banking. “It was the right thing to do to support the island’s clean energy efforts and we are very happy with this outcome.”