Energy Project Financing
We assist Clients and Brokers in their attempt to secure funding by working on funding request that may require innovative financing and structuring. The overall value that our financial team brings to that assignment is creative thinking, underwriting expertise, and strategic relationships with sources.
POWER PURCHASE AGREEMENT
Although financing can come in many different forms for wind, solar, and other renewable energy projects, the various types of financing typically include PPA's, FIT contracts, debt, equity, acquisition, sale-lease back financing, debt/equity combination, etc...
We have sources that can potentially provide financing for USA and International Alternative Energy and Renewable Power Projects utilizing the ability to fund a project based on the contract(s) that a Client has secured.
Generally speaking, there are four types of PPA’s or Off-take agreements:
1. Utility PPA: In the case of utilities, they will have their own form of PPA and usually do not allow modifications. However, utility PPA's will normally be accespted by an invstor's legal counsel and are normally very bankable.
2. Feed-in Tariff (FIT): These contracts are set in stone and not modified; however, they are generally the most bankable with investors and their legal counsel. In both cases above, the off-taker is almost always a good credit risk so credit is not usually an issue.
3. Municipal PPA's: With municipalities, schools, etc., these will normally be fully executed and useful for presentation to the investor. These are favored by investors, as well, and the credit risk is normally minimal.
4. Private PPA's: Are generally with private or public companies, and normally need to be investment-grade credit to be considered by an investor. In many cases, the investor will require his or her own form of PPA (or a modification of the existing one) so, often times, a developer will get a PPA term sheet to be followed by the investor’s own form of PPA, which the investor’s legal counsel has prepared or approved. In the case of biomass projects, a feedstock or supply agreement tends to accompany the PPA. Financial information such as two years of audited financial statements is often required for credit evaluation.
Swiss-Based Bond Program
Swiss-Based Rated Bond Program Overview:
Three year payment holiday – deferred to a flat balloon payment at the end of the loan term
Rated Privately-placed bonds
Bonds are rated; Bond Manager has never failed to sell a rated bond
Potentially 100% financing of the project Sponsor (Client) may have to prove up to 20% of equity in the project, depending on the strength of the Sponsor and/or Off-Take/PPA agreement.
No personal guarantees; Non-recourse, No equity give-up 5 or 10 year bond; coupon rate of 5.5% to 7%, depending on the strength of the project $75M to $500M+ financing
USA based issuer; Bond Manager is based in Switzerland; bonds sold on London market
90 to 120 days to complete the bond offering.
Specialists involved have a history of funding this type of program
After an initial project evaluation of the suitability of the project, the funding request will be sent to the funding group to start the funding process. This can vary but it will normally take anywhere between 3 to 4 months.
MONETIZING ASSETS
PPA
Commercial and Industrial companies could be overlooking potential sources of revenue. A power purchase agreement (PPA) can be used to lessen costs, fund renewable energy development, lower overall utility cost and generate needed working capital.
By entering into a long-term contract with an end-buyer, companies can monetize landfills, waste treatment operations, remote pieces of land, roofs, parking lots, etc... A PPA provides a reliable sources of revenue for the length of the contract and it can make the resulting end product more competitively priced on the open market.
Private Equity Operating Trusts Program
This ‘pool’ of funds are readily available to fund the requests. The project simply has to clear underwriting and due diligence.
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$25M to $500M Project Funding Range
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Major real-estate based and major business projects, including alternative energy, etc. (if a real estate development, the project has to be shovel ready or near it)
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No personal guarantees
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Non-recourse funding
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Sponsor MUST show 10% to 15% equity (hard & soft)—can fund up to 90%, depending on the project
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Loan will be issued for 30 years
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Can be prepaid at any time with no penalty
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15 month payment holiday abatement period at start (if needed) for a real estate development project)
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8% flat interest rate on loan
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Debt Service Coverage Ratio Minimum: 1.25
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No fees required to the Private Equity Operating Trusts Program management for initial project review
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Process from start to funding is typically 90 days
Alternative Energy Project Funding
ALTERNATIVE ENERGY FINANCING,
RENEWABLE POWER PROJECT TYPES:
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Algae to Biofuel Plants
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Anaerobic Digestion Plants
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Biodiesel Plants
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Biomass Plants
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Coal to Liquid Plants
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Liquefied Natural Gas (LNG) Projects
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Solar/Photovoltaic Plants
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Waste to Energy Plants
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Wind Farms
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Other Green Renewable Energy Projects, Geothermal, Hydroelectric, Etc...
