Greenbriar Capital Corp.'s (GRB:TSX.V; GEBRF:OTC) Montalva 100- to 165-megawatt solar project took several steps forward when in August the company reported that the Puerto Rico Electric Power Authority (PREPA) notified it that the Financial Oversight and Management Board (FOMB) reviewed the project and is "supportive of the company's economic proposal."
FOMB has authorized PREPA to work with Greenbriar to "finalize the formal terms of the revised power purchase operating agreement (PPOA)." When that is completed, "PREPA will provide the FOMB with the final agreement and seek FOMB approval to move ahead for final judicial approval."
"I expect Montalva could be generating income for Greenbriar in 2020 and full capacity in 2021." - Ron Struthers, Struthers Resource Stock Report
This news was followed by the announcement that Greenbriar has executed a $195-million project financing mandate with Voya Investment Management LLC for the Montalva project. The company noted that the financing "takes place at the project level and does not involve the sale of the company's shares."
The mandate is to "structure, arrange and provide key capital requirements for the Montalva solar project," and the company notes that completion by Voya is discretionary. Greenbriar will issue under certain conditions, as an incentive to Voya, 3.5 million common share purchase warrants at $1 per share and exercisable for five years.
The agreement for Montalva project is for a 25-year term, with two five-year renewal options, and the project is expected to take around 14 months to construct.
Jeff Ciachurski, CEO of Greenbriar, told Streetwise Reports, "With infrastructure projects, a company's valuation is established on the day of financial close with the project lenders, not when the project construction is completed. This is because the lending institutions will have made sure that any risk is removed before they lend out the funds, requiring the contractor and suppliers to submit letters of credit."
"If anyone were to take over Greenbriar, it would happen when financial close occurs," Ciachurski added.
A valuation report, ordered by a judge and released publicly, valued the Montalva project at an NPV of $191 million. At approximately 22 million shares of Greenbriar outstanding fully diluted, that would result in a value of around $8.60 per share.
Industry observer Ron Struthers rated Greenbriar a "Buy" and wrote in the Struthers Resource Stock Report on August 13, "The cost of electricity in Puerto Rico, around 23 cents/Kwh is about double the average of the rest of the USA. This is because oil has to be imported there and the previous poor management and corruption of PREPA. Puerto Rico is aiming to supply 20% of their electricity with renewable s by 2035 or about 2,000 MW average daily load.
"Solar power generation has come way down in price with technology advancement. The EIA estimates the levelized cost of electricity for solar and onshore wind is cheaper than any other electrical generation. In Texas, a purchase power agreement was signed for just 2.5 cents/Kwh. Prices will depend on location with the biggest factor the amount of sun light and the local electricity costs. The main point is that there is plenty of room for Greenbriar to negotiate a lucrative power agreement.
"While getting Montalva up and running is taking longer, because of the slow progress of politics and rebuilding of the energy grid, things are progressing and change is taking root. Last month the people of Puerto Rico took to the streets and forced the governor to resign. Things are moving forward. I expect Montalva could be generating income for Greenbriar in 2020 and full capacity in 2021," Struthers concluded.
In addition to Montalva, Greenbriar holds the 138-acre Sage Ranch real estate project in Tehachapi, Calif., located 90 miles east of Los Angeles. The project is approved for more than 1,000 housing units. The company is in talks with the U.S. Air Force for providing housing to Air Force members, civilian staff and private contractors and their families.
Greenbriar also recently sold its interest in RealBlock, an entity that has developed blockchain software that provides security for the U.S. title insurance industry. The company retains a net royalty of $3 for every opening transaction; if the software app achieves its goal of 60,000 transactions per month, the net royalty will be $180,000 per month.[NLINSERT]
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.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. Within the last six months, an affiliate of Streetwise Reports has disseminated information about the private placement of the following companies mentioned in this article: Greenbriar Capital.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Greenbriar Capital, a company mentioned in this article.
Disclosures for Struthers Resource Stock Report:
Ron Struthers: 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 currently has a financial relationship with the following companies mentioned in this article: Greenbriar Capital is an advertiser at playstocks.net.