Back in June we introduced you to UGE International with a rundown of their history and recent press releases. Since then they have had some big developments. We reached out to UGE’s CEO, Nick Blitterswyk, for an interview to discuss the company and these developments, which we present below.
For starters, could you please provide investors with a quick overview of what the company does and your business model?
UGE is a publicly listed commercial solar company listed on the TSX Venture exchange under the symbol “UGE.” We work with businesses and other organizations to finance and install solar systems using our unique turnkey approach. In essence, our clients pay nothing up front, and start to benefit from the system from the moment it starts producing energy. UGE is one of the most experienced companies in the space with approximately 375MW of experience, or enough energy to power approximately 40,000 homes.
You have completed projects in the United States, Canada, and the Philippines. We understand that you have the ability to offer your engineering services worldwide but are these three countries your primary focus for turnkey solar projects? Do you foresee operations expanding into any other markets in the future?
That’s correct, right now we are focused on being a market leader in these three markets and believe that within these markets we can see exponential growth for many years. That said, we strongly believe in solar’s potential all around the world so are always looking at additional growth opportunities. In fact, our experience already includes selective projects in Latin America, Europe, Africa, and Asia. What our engineering services arm allows us to do is to leverage our expertise to provide significant value to additional markets, meaning we generate service revenue while at the same time learning about new markets which we feel will open up even further opportunities in the future.
Recently you announced your first green bond offering. Can you break down how these Green Bonds work in layman’s terms?
Absolutely. The projects that we design and build can also be seen as long term assets. What I mean by this is that each project has a set of cash flows generated throughout their lifetime, produced by the generation and sale of solar energy. Not only that, but these projects create very attractive returns over their lifetime.
With our first issuance of project bonds, we are providing investors with an opportunity to invest alongside us in these projects by way of a secured bond that we, in turn, use as leverage to fund these projects.
Our first bond is a five year, non-amortizing note denominated in Canadian dollars. We look forward to further variations on that in future offerings.
Are these Green Bonds aimed at institutions or the individual investor?
For starters we are focused on the retail market. As our project pool grows we look forward to bringing in institutional investors, as well.
How often will you be issuing these bonds?
This is our first offering, but interest has been very strong and we have the sales pipeline to significantly scale these offerings over time.
What is the current approximate value of the company’s project backlog?
At the end of Q1 our backlog was over $41 million USD. Since then we’ve landed our largest US project ever, worth over $8m, so we expect our backlog to continue to grow throughout the year.
What, in your view, sets UGE apart from other publicly listed solar companies?
There are a few key differentiators. First, when I look at solar holistically, it is the broader commercial solar space that I would bet on to provide the most growth and profitability over the next five to ten years. UGE is the one pure-play publicly listed commercial solar company, so we stand out in that way. But second, within the commercial solar sector (including both public and private companies), UGE stands out based on its extensive track record that has seen us deploy over 600 projects across the full project lifecycle. Few if any of our competitors have such extensive experience, and this is a technically complex industry where that experience is a huge differentiator.
What else should we be on the lookout for when it comes to UGE in the rest of 2018 and beyond?
The economics of solar just keep getting better, and will continue to over time as solar technology gets increasingly efficient, and as economies of scale continue to improve. The commercial solar market has only been broadly economical in the last few years, a time that has coincided with UGE growing almost 10X, but without a doubt the best opportunities are in front of us. We look forward to continuing to push the envelope in terms of what this industry offers – completing ever larger projects and project portfolios, introducing new innovations in funding solar projects, and pushing the technical limits of the industry as well. It should be an exciting time.
*The author was paid a fee to write this article.*
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