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Debt Funding Your Bioenergy Project

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How to structure your bioenergy project to make it "bankable" and what to expect in terms of debt profilr

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Debt Funding Your Bioenergy Project

  1. 1. Debt Funding Your Bioenergy Project
  2. 2. Bridge & York Capital Partners • Cover UK & Ireland • Provide debt finance • Access to 3 funds including our own • Renewables specialism - AD, Biomass, W2E, Med Wind, Hybrid • Deal size €500k - €50m
  3. 3. Finance Options Debt Equity /Mezz EIIS/BES
  4. 4. What does a project look like? EPC Offtake RHI Planning Permit ABP Offtake O&M Lease Supply contract Grid PPA REFIT SPV Ltd
  5. 5. Technology • Proven technology with reference sites using proposed feedstock • Track record of delivering projects on time & can meet your timeframes • Will provide an EPC or similar contract • Will provide an O&M contract • Will operate to Irish/UK contract standards • Delivery warranties • Performance warranties (EPC & O&M) • Has financial resources to back up warranties
  6. 6. Feedstock • Will need to be contracted • Quantity • Price • Quality • Term • Link to technology provider’s feasibility study • No unsupported assumptions
  7. 7. Choosing your funder • Don’t waste time chasing miracles • Have realistic expectations e.g. rates, risk • Perform your own due diligence on funder • Do they have ready access to the funds? • What is their track record with similar technologies in Ireland/UK? • What are they offering ? Is it pure debt or are there equity slices, profit shares, conversions etc • Understand all fees, rates, secondary rentals, penalties etc
  8. 8. What will the debt look like? Loan to Value/Cost (LTV) 70% - 90% DSCR 1.2-1.4 times Term 7- 10 (12) years Rate Will vary depending on structure/security Security Charge on shares, step in rights to all contracts and leases Personal Guarantees/ Collateral Possible to eliminate unless particular risks Covenants DSCR Drawdowns Construction or commissioning?
  9. 9. Financial Model • Excel not PDF • Keep it simple and transparent • Facilitate sensitivity analysis (e.g. gate fees, performance) • Base it off supplier’s feasibility report • Base case use warranted performance levels • Base case should disregard “other income” or non contracted income e.g. digestate • Incorporate Working Capital requirements
  10. 10. Recommendations • Good legal team • Make it fundable at every step • Lock down your equity and keep them informed of debt terms • Consider contractual requirements when choosing tech supplier • Engage with funder early and get indicative terms • Don’t waste time – move on
  11. 11. Contact George Delaney gwd@bridgeandyork.com www.bridgeandyork.com 087 6299317

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