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Sourcing the capital
SPV & Project Capital Structuring
Building the structures that let a plant, fleet or project be financed apart from the company that developed it.
Overview
Ring-fencing the asset to unlock project capital
We build the entities, contracts and cash-flow architecture that let a plant, fleet or project be financed on its own merits, separate from the company that developed it. Placing the asset in a special purpose vehicle opens it up to infrastructure equity and project lenders who would not invest in the operating company.
First-of-a-kind and early commercial assets rarely fit a standard template. We apply out-of-the-box thinking to arrange a customised mix of capital sources, and allocate each risk to the party best placed to carry it, so the project can move forward.
When We Are Engaged
When an asset needs to stand on its own
A first commercial facility
The first commercial plant needs funding that the parent company's balance sheet cannot support.
A repeatable asset class
A repeatable asset class is emerging and needs a financeable template that can be rolled out project after project.
An investor requires ring-fencing
An investor or lender requires the asset to be ring-fenced from the operating company before committing.
How We Work
A mandate typically involves
Can it be separated?
Assessing whether the asset can credibly be separated from the operating company, and at what cost.
The structure
Designing the SPV and holding structure, including jurisdiction, tax and shareholder considerations.
Risk allocation
Allocating risk across the sponsor, contractor, technology provider, insurer and lender.
The project model
The full project financial model, sensitivity suite and lender base case.
To financial close
Raising the SPV's equity and debt, and coordinating all parties through to financial close.
Who We Bring Together
Every party a project needs to reach close
Project equity
Infrastructure funds, strategic co-investors and the sponsor's own equity at project level.
Project lenders
Project finance banks, export credit agencies, development banks and public lenders.
Technology & contractors
Technology providers and EPC contractors whose guarantees and warranties underpin the project.
Insurers & offtakers
Insurers and the customers whose long-term contracts give lenders confidence in revenues.
Questions
Frequently asked questions
What is an SPV in project finance?
A special purpose vehicle is a standalone company that owns a project's assets and contracts and usually borrows in its own name. It ring-fences the project's risks from the sponsor, so investors and lenders can assess the project on its own merits.
Who should carry technology risk?
Ideally the party best placed to manage it, such as the technology provider or contractor, through performance guarantees and warranties. Where that is not possible, it usually sits with equity, sometimes supported by insurance or public instruments.
What do lenders look for before committing?
Proven or well-evidenced technology, signed offtake or revenue contracts, credible contractors and suppliers, secure permits and incentives, and a project model that shows the debt can be serviced with headroom.
When should a project be placed in an SPV?
It depends on the stage of development. Setting up the SPV early can help hold contracts, permits and land rights in one place, but the right timing is decided case by case, together with legal and tax advisers.
Related Services
Often combined with
Sectors where we structure projects:
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