What are key points that make green energy development project being attractive? The funding depends on many factors when the purposes are alternative power projects like MSW, solar, wind and biodiesel plants. More convenient for the financier it’s when your project is “closer to realization” stage and also to have all approvals and permits for the land. Power purchase or acquisition agreements need to be at least in the drafting stage or better agreed. Are claimed Long term agreements with provision of assurance for appropriate Debt Service Coverage Ratios between 1.1% and 1.4%. Also generally are needed minimum capacity assurances of the debt creditors of continuous capacity to fulfill the periodical debt payments. Intermediaries and Power Purchasers ordinarily need to have at least BBB credit rating. With many creditors, these contracts are the fundamental underwriting standard. Different creditors do mortgage or not the actives of the company.
Other crucial components of alternative green energy projects funding for any of sustainable landfills and wind, solar, biodiesel plants are the Engineering&Procurement&Construction and Operations&Management. The creditor needs to be confident that the development will be provided accordingly to the schedule and budget. The company providing Engineering&Procurement&Construction should be also investment class which means a BBB credit rating. The Engineering&Procurement&Construction must ensure the project provision in accordance with the schedule and budget. As the “Time means money” then a non-gaining investment imply big losses. The Operations&Management is crucial because the creditor / depositor must have guarantees that will be produced sufficient energy by the investment to fulfill the financial projections and obligations on a continuous daily basis for the debt term. The Operations&Management must be investment grade with the capacity to ensure the lack of production deficits. In case you have not an Engineering&Procurement&Construction or Operations&Management with investment grade, we can provide them to you. An important role can also have the Insurance like Business Interruption Protection. Apply now your brief presentation for eligibility analysis and consideration to receive investment with our Application questionnaire.
Financing structures for funding alternative green energy projects – developments such as sustainable landfills and wind, solar, biodiesel plants, WtE and other sustainable renewable power project can be as follows:
- 100% DEBT. The creditor doesn’t have any equity. The tax incentives are in the beneficiary possession! The interest is established between 6% – 9% and the investment amortization is 10 – 18 years. It is established the grace period for the first 2 years of debt that give beneficiary a lot of time to obtain financial confidence. After this grace period monthly rates and interest will be calculated.
- 100% Debt and Combination of Equity. For 100% DEBT only program are not suitable all the schemes. Our financing sources propose this conjunction of debt and equity to admit minimum sponsor’s investment. It is known that for developers in the scenarios majority there aren’t available big investment amounts. The average value of equity to debt proportion is ordinarily around 30% equity to 70% debt. Frequently the Tax incentives are used as equity.
- Cash – You needn’t it. In case you have certain cash amount, even if it’s not considerable, you can input it into the project in order to consolidate essentially your investment request. The majority of developers want to have internal levers to save capital.