Puerto Rico's power grid was severely damaged by Hurricane Maria last September. Energy prices on the island are some of the highest in the world, with much of the electricity generated by antiquated diesel oil-powered plants. Against this background, a number of large-scale solar electricity generation plants are planned.
Greenbriar Capital Corp. (GRB:TSX.V; GEBRF:OTC), one of the two remaining independent power producing companies trading on the TSX Venture Exchange, just announced it has executed a $265 million mandate agreement with Pegasus Renewable Energy and Sustainable Infrastructure Credit Advisors LP, an affiliate of Pegasus Renewable Energy and Sustainable Infrastructure Credit Fund LP (RESIC). Along with a $50 million agreement with the same firm announced on May 1, this arrangement more than completes the $305 million financing necessary to construct the 100 MW Montalva solar project in Puerto Rico.
Under the terms of the agreement, and subject to certain conditions, Greenbriar will issue to Pegasus two million common share purchase warrants at a price of CA$1.00, exercisable over a period of five years.
"Greenbriar's stock is regarded as fundamentally one of the best investments we have come across." - Clive Maund
According to Greenbriar, "the purpose of the mandate is to structure and provide the entire and complete capital requirements of the US$305 million Montalva Project financing package."
At the end of April, the Financial Oversight and Management Board (FOMB), a body established by the U.S. Congress "to recommend and expedite critical energy and infrastructure projects" in Puerto Rico, approved the Montalva Solar Farm to proceed to the next stage.
PV Magazine noted on May 8 that a "100 MW (AC) project is being developed by Canada's Greenbriar Capital Corp through the unit PBJL Energy Corporation. The Montalva Solar Facility would be located between the municipalities of Guanica, Lajas and Barrio de Montalva, in the southwest of the island. 'The Project is located in an area having among the highest, if not the highest, solar insolation in Puerto Rico,' the authority said in its document."
The receipt of the funding mandate now advances the Montalva project one step closer to execution and financial close.
"We expect the financial close to occur in the first quarter of 2019," Jeffrey J. Ciachurski, CEO and director of Greenbriar Capital, told Streetwise Reports. "With the financial close, most companies trade based on the NPV of the project."
A valuation report, ordered by a judge and released publicly, valued the Montalva project at a NPV $191 million. At 18 million shares of Greenbriar outstanding, that would result in a value of over $10 per share.
Only two independent solar power producers trade on the TSX Venture Exchange, Etrion SA (ETN:TSX) and Greenbriar Capital. Etrion, which has developed solar projects in Japan and Chile, trades at CA$0.28, has 334 million shares outstanding, and has a CA$95 million market cap, but Etrion has no projects deemed a Critical Project in Puerto Rico.
Greenbriar has 17 million shares outstanding, is trading at CA$1.02, and has a CA$18 million market cap. Greenbriar was spun out of Western Wind, which traded on the TSX Venture Exchange, after it was acquired by Brookfield Renewable Energy Partners LP for $420 million in 2013.
Other independent renewable power producers trading on the TSX Venture Exchange have been acquired. Alterra Power Corp., a renewable energy company founded by Ross J. Beaty, was bought out by Innergex earlier this year, at a 58% premium to the stock price.
Also this year, in April, U.S. Geothermal Inc. was purchased by Ormat Technologies Inc. for approximately $110 million.
In 2013, Capstone Infrastructure Corp. acquired Sprott Power Corp. for $70 million.
As major as it is, the Montalva Solar Farm isn't the only project in Greenbriar's pipeline. The company, through its Realblock subsidiary, is advancing the first publicly traded real estate blockchain enterprise. Landmark Title Insurance of Phoenix and Title Security of Arizona have both announced that they will incorporated the disruptive technology into their operations.
Greenbriar noted that these two companies were responsible for over 20,000 real estate transactions in 2017 and underwrote title insurance valued at over US$3 billion. Real estate transactions are still stuck in the stone age, with it taking days for transactions to complete. The use of blockchain technology can bring security and transparency to these transactions, and remove much of the inefficiency, as well as reduce costs.
The program was developed in conjunction with Professor Todd Taylor, the founder of the Blockchain Lab at Arizona State University.
The value of the program was underlined by Title Security's CEO, Tommy Sullivan, who noted, "The addition of Landmark Title means that the risk-removing, and time-saving attributes of RealBlock will now be used in over 25 offices in the state's two largest counties. Based on the feedback I've received from other escrow and title agencies…we expect many more to sign on with RealBlock."
Multi-faced Greenbriar also is working on a smart glass that darkens or lightens glass instantly using liquid crystal technology, based on technology developed in Israel and Korea.
Greenbriar has caught the attention of technical analyst Clive Maund. Writing on CliveMaund.com in April, Maund noted that "In this increasingly difficult environment for investors, Greenbriar Capital looks like a real standout, with its excellent fundamental prospects and still very cheap stock, which won't be cheap for much longer."
Maund enumerated the many facets of the company. "Greenbriar and its predecessor have had a presence on Puerto Rico for about 10 years – long before the devastation of Hurricane Maria and even the financial crisis on the island, and has owned a $1.9 billion solar electrical generation contract for 6 years." Maund noted. "Greenbriar has already made a considerable investment in its Montalva solar project on the island, but due to the credit crisis and the policy of "getting by with what you've got" mentality has not been able to advance the project to completion – until now. That all changed with the Hurricane, which wrecked the decrepit infrastructure, necessitating a clean sweep and radical solutions, and with the electrical and communication grids such as they were having been trashed by the hurricane literally overnight, the appeal of big solar projects on the island is obvious, especially any whose planning is already relatively advanced as the Montalva project is, and the urgency of the situation means that the project will be expedited so that it is up and running as soon as possible."
"In addition the company is in the forefront of the 'Smart Glass' revolution. In a nutshell, this is glass that uses liquid crystal technology to instantly change light transmission qualities. . .An impediment to the widespread use of Smart Glass thus far has been longevity and transparency issues, but great strides have been made towards solving these problems by a company called Gauzy. . .Greenbriar has developed its own Smart Glass using the Gauzy solutions and will make the glass widely available through partnerships with manufacturing, distribution and installation," Maund stated.
"In addition, Greenbriar has launched a wholly owned independent subsidiary company called Realblock, a first of its kind functional Real Estate blockchain enterprise. As any of you who have had Real Estate dealings will know, the procedures are almost Dickensian – it can take weeks to do what could be done with modern technology like Blockchain in a matter of days or even hours. Blockchain promises to revolutionize the Real Estate industry by greatly reducing the time required to get things done and Greenbriar is at the forefront of this with Realblock.
"Greenbriar also has profitable Real Estate interests. After the 2008 market crash Jeff Ciachurski bought a block of land in Tehachapi, California for $1 million, which is now worth 5 times that, but if developed into town homes, this property would yield the company $260 million over 7 years. Finally the company has a 50% (optionally 100%) interest in their 80 Megawatt Blue Mountain Utah Wind Energy project," Maund stated.
"This stock is regarded as fundamentally one of the best investments we have come across. Just on the basis of the Montalva solar energy project getting the go ahead, and with the just announced Congressional support it should do, the stock is probably worth C$10.00, and that doesn't factor in its other pioneering projects, and right now it is exceptionally cheap after drifting lower for months," Maund concluded.
Ron Struthers wrote in Struthers Resource Stock Report on April 3, "You could not find a much stronger and experienced management than what is leading Greenbriar. And with just 17.9 million shares out, considering the assets in the company, it would be much more than icing on the cake for many alternate energy companies."
On June 4, Ron Struthers added, "One of the toughest hurdles to develop any resource or energy project is obtaining the financing for build out and Greenbriar now has this all wrapped up, so a major risk factor has been removed."
"The project is on fast track as a critical energy and infrastructure project for Puerto Rico under the U.S. Financial Management and Oversight Board. I believe we are not far off from the day that this gets the green light to start construction. Not to repeat myself, but is important to remember that Montalva once built will generate revenue of US$58 million per year for 35 years to Greenbriar. That is over three times Greenbriar's current market cap," Struthers concluded.
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1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an employee. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.
Clive Maund: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None.
Disclosure from Ron Struthers, April 3, 2018:
I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Greenbriar Capital. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: Greenbriar Capital is an advertiser on Playstocks.net. I determined which companies would be included in this article based on my research and understanding of the sector.