Revolve Renewable Power Corp., an owner, operator and developer of renewable energy projects, is pleased to announce the completion of the interconnection milestone related to the 250MW Parker Solar and Storage Project (the "Parker Project"), which was sold in January 2023 to ENGIE IR Holdings LLC a wholly owned subsidiary ENGIE S.A. ("ENGIE"), a global leader in the energy sector.
The terms of the sale, which also included the sale of the 1,000MW Bouse Solar & Storage Project (the "Bouse Project") are set out in the news release date January 11, 2023 (https://revolve-renewablepower.com/revolve-announces-sale-of-1250mw-of-utility-scale-solar-and-storage-projects/) and are also summarised below.
The Transaction
The total consideration payable by ENGIE is within the range of guidance previously provided by the Company for the sale of utility scale development assets, which for reference is outlined in page 10 the Company's corporate presentation (https://revolve-renewablepower.com/wp-content/uploads/2023/06/Revolve-Corporate-Presentation-June-8-2023.pdf).
The Company received an upfront payment of US$2,000,000 (inclusive of the reimbursement of development costs) on completion of the transaction in January 2023. US$800,000 of this payment was recognised as revenue in the Company's Q3 FY2023 financial accounts with the remaining US$1,200,000 accounted for as deferred revenue.
Milestone Payments
The remaining consideration is linked to each of the Parker Project and Bouse Project successfully completing the following development milestones:
• completion of further interconnection studies;
• Issuance by ENGIE of a Notice To Proceed (an "NTP") construction works to the applicable EPC contractor.
• on the Commissioning Date (the "COD"), with such date being the date that a project has been synchronized to the grid and is capable of delivering all of its installed capacity to the grid.
The Company previously guided that it expected the first of these milestones to be achieved in 2023 when further interconnection studies are issued. We are now pleased to confirm that the completion of further interconnection studies milestone has been met for the Parker Project.
Put Option
As part of the transaction the parties entered into a put option agreement (the "Put Option") allowing ENGIE to sell the Parker Project and Bouse Project back to the Company for a limited period following receipt of the results of the next interconnection studies due for each project.
This Put Option exercise period commenced when the interconnection study was received for the Parker Project and has now since expired for this project, with ENGIE choosing not to exercise the option.
The next milestone payment related to the Parker Project totalling US$850,000 has now become due and is expected to be paid within the next 30 days. There were no additional development costs incurred by the Company in relation to this milestone.
As a result of this the Company expects to record revenue from the transaction in Q1 FY2024 (July 2023 to September 2023) totalling of US$1,090,000 consisting of the milestone payment above and US$240,000 of previously deferred revenue.
Steve Dalton, CEO of Revolve commented: "We are delighted to reach a key milestone for the Parker Project and the overall transaction with ENGIE. The milestone payment provides us with further capital to continue funding the business and our expanding project development pipeline. While the expiration of the put option removes the risk of the Parker Project being sold back to us and the uncertainty that this generated for investors.
We can now look forward to continuing to supporting the team at ENGIE in developing the Parker Project towards reaching its next milestone as well as the release of the next interconnection study for the Bouse Project in the first half of next year. "
The Parker Project
The Parker Project is a 250MW solar and storage project, located on approximately 1,530 acres of land wholly managed by the Bureau of Land Management (the "BLM") in La Paz County, Arizona. The Project is near existing transmission infrastructure and easily accessed through existing state road network. It has the capacity to provide electricity to an equivalent of approximately 300,000 homes. The Company commenced the greenfield development of the Parker Project in mid 2021.
