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$ 9.55 trillion private capital fund to fund the transition to renewable energy

Currently, it is not generally known that there are thousands of renewable energy projects for excavators around the world. They span solar, wind, waste to energy and other sectors, with transaction value of $ 5 million to over $ 5 billion. Unfortunately, most of them do not have channels to access the vast amount of capital they have available, creating a constant barrier to the clean energy of terawatts they are ready to operate. However, there is now a structure in place to release up to $ 9.55 trillion in private capital directly to these projects. The “group thinking” of current energy policymaking is to put the transition cost entirely on the consumer, but now Project Finance Exchange (PFX), They “should think again!” The numbers don’t lie …

“We are not running out of money around the world, but we cannot find a way to where we need it most,” said Fatih Birol, Secretary-General of the International Energy Agency (IEA).

In June of this year, Birol widened and closed the transition finance gap with the launch of Project Finance Exchange (PFX), the most liquid and currently most accessible global capital market, private capital. Emphasized the need. To clarify Mr. Virol’s comment, “… there is no shortage of funds …” means that there is a wealth of $ 9.55 trillion of private capital available to invest in what is defined as “alternative assets” in the market. Yes, because renewable energy is clearly popular. This enormous capital reserve is managed and allocated by more than 126,000 funds serving the market for thousands of projects at one time. However, the market has become so crowded, fragmented and opaque that it has become virtually impossible for projects and funds to distinguish from each other. The private-capital “market” has grown since its inception more than 20 years ago, but there has never been a private-capital “market” that seamlessly connects projects and funds with the privacy demands of private capital. bottom. Engage As a result, money could not “… find the way to where it was most needed.”

The market fragmentation was overcome and the structure was introduced with the opening of the Project Finance Exchange (PFX) in April this year. To date, more than $ 30 billion of private capital is available from PFX-registered “starter” funds, and transactions are currently underway. PFX provides registered funds with 40 market sectors for investment and lending, but renewable energy is clearly popular. The numbers don’t lie …

Important data

  • $ 9.55 trillion of available private capital. Source: Capgemini World Wealth Report 2020 (Pages 7 and 12). 14.2% of the total $ 74 trillion owned by 19 million U / HNWI worldwide for allocation to alternative assets where renewable energy is a priority investment.
  • 126,000 alternative investments, Hedges, private debt / equity funds, asset managers, and family offices that manage and allocate this capital. The “starter” PFX investor registration data shows that renewable energy is a preferred investment. sauce: PFX.

Project finance

From the 1950s to the mid-2000s, project finance was limited to megadollar infrastructure and construction projects funded by leading banks and other institutions. This ended when the 2008 bank meltdown almost eliminated the liquidity of these financial institutions. “Project finance” is still widely recognized as outside the scope of “small” transactions (less than $ 500 million). In fact, it is now dominated by a much more flexible private capital fund that handles unlimited transactions of less than $ 10 million.

But clear beliefs still prevail. Loans are based on the performance and financial stability of those who have contracted to purchase products from the projects constructed, rather than on business plans or forecasts of prospects. In the case of energy, this means the project’s PPA (Power Purchase Agreement), usually signed with a national or regional grid.

Project finance can be defined as a loan to income from unconstructed assets that banks are prohibited from doing by their own regulations. But for retail investors, this unique structure provides the long-term risk mitigation returns they seek. Also, project principals, such as teams, businesses, local governments, and national governments, are free and have no financial responsibility.

How to fund a renewable energy project

The editorial by the chairman was published in the July 2009 edition of EPC World, a magazine for EPC (Engineering Procurement and Construction) contractors who build projects. How to fund a renewable energy project A focus on waste to energy and written for a “trade” audience, it clearly explains how to fund renewable energy projects with private capital. PFX allows the world’s renewable industry to turn to private capital markets with liquidity comparable to that of other institutional investors and to fund projects.

PFX Comments on COP-26 and Transition Loans

PFX Chair David Rose said: According to one Renewable Energy Industry Association, there are more than 1,000 projects in the United States alone, with transactions ranging from $ 10 million to over $ 5 billion, and everything is stuck because we can’t find a way to the right investor. I am. This can be reasonably estimated at 5,000 worldwide. The numbers are not a lie, with over 126,000 private capital fund managers ready to fund these projects, ambitious and enthusiastic. Through PFX, funds can seamlessly connect and engage projects, unleash huge reserves of $ 9.55 trillion in private capital and mitigate climate emergencies. PFX is free to use project You can register for free at Funds. We have survived all discussions, goals and pledges, promoted all cash-deficient projects with potentially terawatt clean energy, and are now up and running. Privacy is guaranteed for both the project and the funds, and the ability to handle multiple transactions. “

$ 9.55 trillion private capital fund to fund the transition to renewable energy

Source link $ 9.55 trillion private capital fund to fund the transition to renewable energy

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