Biomass Energy projects – Equity is key! Nationaal Groenfonds - Emile Peters 10 October 2017
SDE Subsidy committments – Biomass growing: Source: https://www.rvo.nl/subsidies-regelingen/sde/feiten-en-cijfers IPFA Biomass conference- 10 October 2017
• Substantial biomass projects to be developed • In 2016 alone: biomass expectations (per SDE) > € 3.2bln. • This will require capital investment of > € 400mln (est.) • Remember: that is 2016 alone! IPFA Biomass conference- 10 October 2017
SDE biomass commitments expected to grow further: Source: https://www.rvo.nl/subsidies-regelingen/sde/feiten-en-cijfers IPFA Biomass conference- 10 October 2017
Conclusion: • Let’s assume: every project requires at least 20% equity • Then 2016 biomass project developments alone require equity of (20% * € 400=) € 80mln . • Our experience: equity is often the bottle neck • Raising equity delays projects IPFA Biomass conference- 10 October 2017
Withdrawn Being developed Realised SDE Realisation Withdrawn rate: IPFA Biomass Conference 2017 - Amsterdam
Complications with equity raising: • Mitigation project risks – takes time & money: Source: Triple Bridge BV IPFA Biomass conference- 10 October 2017
Plus: risk of dilution • Equity investors require substantial investment return • This dilutes project developers • Do all for nothing, or very little IPFA Biomass conference- 10 October 2017
Solution: mezzanine financing • Subordinated loans • Capital for senior lenders • Reasonable terms and interest rate • This is what Nationaal Groenfonds can bring IPFA Biomass conference- 10 October 2017
Purpose Nationaal Groenfonds: Green living environment (Nature) Network and reputation Years of experience Financial support Thanks to this background: Energy transition Very successful: - Strong name >700mln in financings Necessary for enviroment - Strong network 345ha nature created in 2015 Requires connecting 136k tons CO2 emissions government policy with avoided Strength is connecting market initiatives government policy with And smart financing private enterprise Natural role for GRF Through smart financing IPFA Biomass conference- 10 October 2017
Connecting government and private sector Social return / Government Sustainability Financial return Private sector and risk Familiar theme for GRF (also key in nature development) IPFA Biomass conference- 10 October 2017
GRF Task in energy transition: Risk bearing capital Energy transition Access to network Project vof support financiers IPFA Biomass conference- 10 October 2017
GRF central themes: Acceleration Energy transition Connection Development
Thanks for your attention more info: www.nationaalgroenfonds.nl
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