The Land: New platform connects landowners with renewable energy developers
A fast-growing Australian venture is enabling farmers to use their land to access a life-changing cash injection, while also unlocking opportunities for renewable energy developers to deliver greater energy to the grid.
Many regional landowners are interested in leasing their land for renewable energy projects, but it’s hard to know where to start and who to trust.
At the same time, the developers of these projects are eager to identify potential land to establish more renewable energy farms to meet the skyrocketing demand for clean energy.
Enter RELA, an Australian business that has created Australia’s only land-owner aligned renewable energy platform that is connecting landowners with institutional capital and top-tier developers.
As well as connecting the two parties, RELA’s model also gives landowners the opportunity to receive the lease payments upfront in one lump sum rather than over a long lease period.
The result is a win-win outcome for both landowners and developers, said RELA director Eran Rimmer.
“The RELA platform has been designed to empower landowners to move forward with confidence to take advantage of renewable energy opportunities and to unlock valuable liquidity in their land, without needing to to sell their land,” he said.
“Australia’s land is the foundation for our energy future, and we want to ensure landowners receive fair benefit for their role in the transition to clean energy.
“We’re facilitating landowners and developers to connect, using fair market value to finalise a transaction in a fraction of the typical time. We see it as a win for all parties: landowners, developers and the planet.”
Speeding up renewables
The RELA model includes both RELA Connect – which uses cutting-edge technology that quickly assesses the suitability of any piece of land for renewable energy projects – as well as RELA Advantage, a lease prepayment product.
RELA Connect provides landowners with independent and transparent knowledge of their land’s potential viability for a renewable energy project and then connects them with suitable developers. It’s helping to speed up the delivery of renewable energy projects across the country while also ensuring landowners can reap the benefits.
Using more than two billion data points, the RELA Connect platform can assess if a property is viable for renewable energy development within seconds and determine the quantum of renewable energy that can be generated on that land and distributed through the grid. It can then calculate the subsequent value that should flow to the landowner.
RELA works with landowners to help prepare them for engagement and then connects them to a qualified panel of renewable developers who have the capacity to deliver these projects.
At the same time, the RELA Advantage lease prepayment product means landowners can bring forward lease cash flows to allow for immediate liquidity. Landowners get upfront access to substantial lump sums that they can then use to pay down debt, build their business, or purchase more land.
“This is empowering landowners with renewable projects on their land to be able to secure and build their futures at a time of uncertainty, without needing to sell their land,” said RELA senior executive Lubo Golic.
“RELA Advantage brings forward landowner’s lease payments in a hassle free, flexible and tax efficient way. They can then use those funds for whatever they need, without any fear about the future of the project. Instead of say getting $300,000 each year for 30 years, the landowner can receive the fair value of the lease upfront, a really substantial sum.”
Prepayment funds growth opportunities
Mr Rimmer said that with the current power crisis, the grid “on a knife’s edge” and clear market uncertainty, farmers with renewable energy projects on their land have welcomed the use of RELA Advantage lease prepayments to remove the risk of the unknown, accelerate their financial goals, and cash in on the opportunities.
Queensland farmers Belinda and Cameron who worked with RELA to receive the RELA Advantage lease prepayment of their solar farm said the decision was a “no brainer” for them.
“Rising interest rates equates to rising debt repayments and falling asset prices, and with no end in sight to increasing rates, the RELA Advantage lease prepayment allows us to navigate the challenges by paying down debt and with the cash leftover to buy new land as opportunities arise,” said Belinda.
“Through RELA we’re able to pull money out of the lease, a depreciating asset, and put it straight into nearby land, which, based on history, will go up three to four times in value over the same period as the lease,” said Cameron.
“We’ll be far better off in 25 years and that’s what matters. We’re thinking about our children, and this prepayment allows us to set them up nicely.”
Ease and efficiency
RELA Advantage is a proven product that has been endorsed through completed transactions with the big banks, big developers and a range of landowners, including some of Australia’s largest.
Genex Power, one of the developers of renewable energy generation and storage projects working with RELA, said it was pleased to be involved in providing the benefits that flowed to the landholders.
“The RELA proposal was straightforward without any impact to Genex or the lender’s rights…the transaction far exceeded Genex’s expectations in terms of ease and efficiency,” said Simon Kidston, Genex Co-Founder and Director.
“We’re pleased we could offer the landowner the additional benefits of receiving pre-payment of the lease agreement, without prejudicing Genex or our financiers in any way. We’re looking forward to replicating this process on future projects.”
Twynam Pastoral Co, owner of the land for Genex’s Jemalong Solar Farm, also expressed that the process was fair and smooth.
“It was a great experience,” said Twynam chief financial officer Colin Sussman.
“Communication was clear and timely, any matters requiring resolution were dealt with equitably and decisively. The RELA team delivered on every undertaking they gave throughout the process.”
Here are the key benefits of the RELA offering to landowners:
Landowners don’t wait 20+ years for income that may never come. RELA prepays landowners the fair value of their renewable energy ground lease rent upfront. It’s not a loan and you don’t have to pay it back.
Pay down your debts and remove your personal liabilities. With rising interest rates, use RELA Advantage to pay down your debt, avoid higher debt repayments/potential default, and remove the stress.
Build your future the way you want. With the RELA Advantage lease prepayment you could build your wealth, business, or landholding. Based on historical returns, if invested today in appreciating assets such as land, property, or stocks, your family’s wealth would be worth multiples relative to holding the lease over 20+ years.
Lump sum payment, without the tax. No CGT and no stamp duty is payable. Your tax is deferred and spread over the remaining lease period. RELA can discuss details with your accountant.
All your rights as a landowner are protected. You continue to own your land and benefit from all capital growth and the agricultural use of your land. Your lease with the wind/solar farm also stays exactly as it is.
Enhance your family’s lifestyle. Whether you build a new family home, renovate an existing one, buy a beach house, or an apartment in the city, all of which will appreciate in value, you and your family can enjoy an enhanced lifestyle today.