Financing Anaerobic Digestion Projects...A Bankers Perspective - John Barker (HSBC)

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This presentation formed part of the Farming Futures "Farm Biogas Developer: Expert workshop" 30th June 2009

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<ul><li> 1. Financing Anaerobic Digestion Projects .. A Bankers Perspective. John Barker Corporate Agribusiness Manager</li></ul> <p> 2. Key Issues </p> <ul><li>Credentials </li></ul> <ul><li>Construction Risk </li></ul> <ul><li>Process Risk </li></ul> <ul><li>Supply Risk </li></ul> <ul><li>Output Risk </li></ul> <ul><li>Environmental Risk </li></ul> <ul><li>The Economics </li></ul> <ul><li>The Deal Structure </li></ul> <ul><li>Financial Risk, Legal's &amp; Security </li></ul> <ul><li>Today's World Of Finance</li></ul> <ul><li>Conclusions </li></ul> <p> 3. Credentials </p> <ul><li>Track Record </li></ul> <ul><li>Mix &amp; Balance of Skills </li></ul> <ul><li>A Common Vision </li></ul> <ul><li>Well Researched and Prepared </li></ul> <p> 4. Construction Risk </p> <ul><li>Turn Key Contracts </li></ul> <ul><li>Fixed Price? </li></ul> <ul><li>Cost Over-runs? </li></ul> <ul><li>Credentials and Standing of the Contractor </li></ul> <ul><li>Performance Guarantees </li></ul> <p> 5. Process Risk </p> <ul><li>Will The Plant Work?! </li></ul> <ul><li>Proven Chemistry? </li></ul> <ul><li>Proven Technology? </li></ul> <ul><li>Scalability Issues? </li></ul> <ul><li>Due Diligence </li></ul> <p> 6. Supply Risk </p> <ul><li>Feedstock </li></ul> <ul><li><ul><li>Imported Waste </li></ul></li></ul> <ul><li><ul><li>Existing Under Utilised Resource </li></ul></li></ul> <ul><li><ul><li>To Be Grown </li></ul></li></ul> <ul><li><ul><li>Continuity </li></ul></li></ul> <ul><li>Contracts &amp; Terms </li></ul> <p> 7. Output Risk </p> <ul><li>Electricity Contracts </li></ul> <ul><li><ul><li>Length? </li></ul></li></ul> <ul><li><ul><li>Value? </li></ul></li></ul> <ul><li><ul><li>Price Ratchets? </li></ul></li></ul> <ul><li>Heat Use? Value? </li></ul> <ul><li>ROCS </li></ul> <ul><li>Digestate Disposal </li></ul> <p>ROCS 8. Environmental Risk </p> <ul><li>Process Is Controlled &amp; Fit For Purpose </li></ul> <ul><li>Plant Maintenance </li></ul> <ul><li>Digestate Disposal </li></ul> <ul><li>Site Re-instatement costs? </li></ul> <p> 9. The Economics </p> <ul><li>Your Business Model </li></ul> <ul><li>Efficiency Factors </li></ul> <ul><li><ul><li>Gas Quality </li></ul></li></ul> <ul><li><ul><li>Engine Efficiency </li></ul></li></ul> <ul><li><ul><li>Running Time </li></ul></li></ul> <ul><li>Sensitivities </li></ul> <ul><li>Payback Period </li></ul> <p> 10. The Economics </p> <ul><li>UK Market Returns Are Changing </li></ul> <p> 11. The Economics 12. The Deal Structure </p> <ul><li>Stake vs Debt </li></ul> <ul><li>Structured Finance </li></ul> <ul><li><ul><li>Asset Finance </li></ul></li></ul> <ul><li><ul><li>Term Loans </li></ul></li></ul> <ul><li><ul><li>Working Capital </li></ul></li></ul> <ul><li>Repayment Period </li></ul> <p> 13. Financial Risk, Legal's &amp; Security </p> <ul><li>What Legal Entity? </li></ul> <ul><li>Security </li></ul> <ul><li><ul><li>Debenture </li></ul></li></ul> <ul><li><ul><li>Land &amp; Assets </li></ul></li></ul> <ul><li><ul><li>Supporting Guarantees </li></ul></li></ul> <ul><li>Facility Terms &amp; Conditions </li></ul> <ul><li>Covenants</li></ul> <ul><li>Interest Rate Protection </li></ul> <p> 14. Todays World Of Finance </p> <ul><li>Market Turbulence </li></ul> <ul><li>Credit Availability </li></ul> <p> 15. Conclusions </p> <ul><li>John Barker </li></ul> <ul><li>Corporate Agribusiness Manager </li></ul> <ul><li>07786 524846 </li></ul> <ul><li>[email_address] </li></ul>