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As I write my articles for my Google readers about Alternative Energy Financing you will find I am writing about Commercial Funding International, LLC. I want to write about what they offer for Alternative Energy Financing so below you will see all about them.

ALTERNATIVE ENERGY FINANCING, RENEWABLE ENERGY FINANCING, GREEN ENERGY FINANCING, CLEAN ENERGY FINANCING, SUSTAINABLE ENERGY FINANCING,

Commercial Funding International, LLC (CFI) is a boutique commercial mortgage brokerage and consulting firm.

CFI is motivated to help companies with projects with proven, cost-effective technologies that can reduce the impact of global climate change, improve air quality, stabilize the electric power grid, better help meet growing electricity demand and lessen our dependence on fossil sources.

Project financing is a crucial component of any successful alternative energy or renewable power project, especially during difficult economic times. CFI can assist Clients and brokers in their attempt to secure funding by working on $5M (USD) to $500M (USD) and higher alternative energy and renewable power funding requests that may require innovative financing and structuring.

CFI has expertise and network contacts that can provide capital solutions and project finance advisory services in the energy, power, and infrastructure sectors across the globe. Our network can combine extensive industry experience, expertise and underwriting capacity to help create comprehensive solutions to our Clients’ most critical strategic and funding needs.

CFI Alternative Energy Financing services can result in the alignment interests of investors, developers and large scale energy users to finance and build renewable energy projects. The strategies of funding may leverage debt, equity, leasing and power purchase agreement (PPA) structures to meet energy financial objectives. Through our network contacts, specific government grant and incentive programs may be utilized to deliver maximum return on investment.

The CFI network of sources are versed in a wide variety of financing programs, including equity fundraising for solar startups, construction financing for power plant development, PPA origination, energy asset acquisitions and power billing programs.

Our network includes Lender/Investor underwriting groups that can provide creative financial solutions, in addition to working with major commercial banks, multilateral institutions, and export credit agencies. On the equity side, our network includes strategic and financial investors looking for investment opportunities for greenfield and/or developed projects in the energy, power, and infrastructure sectors.

Also, one of our sources has several institutional investors that represent a combined $30 Billion in funds earmarked for Solar, Wind and other Renewable Energy projects.

Our Lenders and Lender/Investor underwriting sources prefer that a Client have at least 10% in cash invested in the project already or proof they have it available to invest. Otherwise, our sources may be able to bootstrap the financing of the project with a combination of senior debt financing, debt financing and equity capital, Sale-Lease Back Financing, Joint Venture Financing, or our sources may be able to arrange financing for your energy project based on your Power Purchase Agreement (PPA) and/or the creation of Industrial Development Revenue Bonds.

Power Purchase Agreement (PPA) Financing; Off-Take Agreement Financing.

Although financing can come in many different forms for wind, solar, and other renewable energy projects, the various types of financing typically include PPA's, FIT contracts, debt, equity, acquisition, sale-lease back financing, debt/equity combination, etc.

We have sources that can potentially provide financing for USA and International Alternative Energy and Renewable Power Projects utilizing the ability to fund a project based on the contract(s) that a Client has secured.

Through our network, CFI has the potential to provide PPA Financing for a project or company with investment grade entities worldwide. The investment grade entity may be a governmental agency, local municipality, feedstock provider, off-taker power purchaser, a technology provider, Contractor, JV Partner, etc.

This type of lending is not project specific but it is based on typically the credit worthiness of the investment grade entity involved in the project (BBB or higher on S&P or Baaa or better on Moody’s).

Generally speaking, there are four types of PPA’s or Off-take agreements:

1. Utility PPA: in the case of utilities, they will have their own form of PPA and, usually, do not allow modifications; however, utility PPA’s will normally be accepted by an investor’s legal counsel and are normally very bankable.

2. Feed-in Tariff (FIT): these contracts are set in stone and not modified; however, they are generally the most bankable with investors and their legal counsel. In both cases above, the off-taker is almost always a good credit risk so credit is not usually an issue.

3. Municipal PPAs: with municipalities, schools, etc., these will normally be fully executed and useful for presentation to the investor. These are favored by investors, as well, and the credit risk is normally minimal.

4. Private PPAs: are generally with private or public companies, and normally need to be investment-grade credit to be considered by an investor. In many cases, the investor will require his or her own form of PPA (or a modification of the existing one) so, often times, a developer will get a PPA term sheet to be followed by the investor’s own form of PPA, which the investor’s legal counsel has prepared or approved. In the case of biomass projects, a feedstock or supply agreement tends to accompany the PPA. Financial information such as two years of audited financial statements is often required for credit evaluation.

Monetizing Assets with a Power Purchase Agreement

Commercial and industrial companies could be overlooking potential sources of revenue. A power purchase agreement (PPA) can be used to lessen costs, fund renewable energy development, lower overall utility costs and generate needed working capital.

By entering into a long-term contract with an end-buyer, companies can monetize landfills, waste treatment operations, remote pieces of land, roofs, parking lots, etc. A PPA provides a reliable source of revenue for the length of the contract and it can make the resulting end product more competitively priced on the open market.

100% Joint Venture Equity Funding

CFI has expertise and network contacts that can provide capital solutions and project finance advisory services in the energy, power, and infrastructure sectors across the globe.

Our Lenders and Lender/Investor underwriting sources prefer that a Client have at least 10% in cash invested in the project already or proof they have it available to invest. Otherwise, our sources may be able to bootstrap the financing of the project with Debt financing and Equity Capital or through 100% Joint Venture Equity Funding, as described below.

CFI has a unique investment fund source that can provide 100% joint venture equity funding that covers all project costs including land acquisition, hard costs and soft costs. There is no interest charged during the term of the investment (typically 3-5 years). Instead, the investment fund takes a minority equity position within the proposed project (usually 15% - 25%) as compensation for the investment, with the buyout options determined during underwriting.

Investment Criteria

The investment fund can provide 100% financing for all types of alternative energy and renewable power projects. In general, a Client must meet the following criteria:

This program is for NEW DEVELOPMENT PROJECTS ONLY that require $10 million or more;

The project must be shovel-ready--defined as ready to break ground in 90 days or less;

The project must be sponsored by an experienced developer with a significant financial stake.

100% Joint Venture Equity Advantages joint venture funding image

The advantages of this financing structure include:

The developer pays no interest during the entire construction period--potentially saving millions of dollars in interest expense; Because the fund participates as a 100% joint venture equity partner, they assume nearly 100% of the project risk until completion or stabilization; Rather than the typical 65% LTV available from traditional lenders, the developer will receive 100% of the total project costs, including both hard and soft costs.

Due Diligence Deposit and Equity Participation.

As a condition of funding, the investment fund will require a due diligence deposit that will be used to cover underwriting expenses. The amount and terms of the deposit will be fully articulated within the Letter of Interest (LOI). The required equity participation will also be articulated within the LOI, typically 15% - 25%.

The above outlined program is subject to change in regard to rate and terms and other conditions.

Although financing can come in many different forms for wind, solar, and other renewable energy projects, the various types of financing typically include PPA's, FIT contracts, debt, equity, acquisition, sale-lease back financing, debt/equity combination, etc.

Articles by Don Conrad

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