Project Financce and Equity
Thanks to our Investors & Partners Network (IPN), Investocom SA has the ability to raise both Project Capital (Finance & Equity) and Pre-investment Funding.
Depending on varying sizes, both public and private sector projects are considered in terms of sustainable, economic and community development value. Investment instruments may include a combination of finance (debt), equity and mezzanine finance. Specific requirements are assessed on a case-by-case basis.
Being the intermediary of a global network funding facility,with financing formid-sized and major renewable energy, infrastructure, industry and technology projects, Investocomexposure to projects generally does not exceed 50% of total project costs. Funds are invested mostly at financial close stage of projects from a minimum USD $10 Million to USD $500 Millionmaximum per project,for a 5 to 10 year term,with a required minimum of 10%cash deposit or underwriting from project owners. Where the required 10% minimum is unavailable, we may consider investing under a separate transaction, based on economic viability of the project and that all stakeholders involved benefit from it. We work on project to project basis to maximise investment value and be flexible toinvestment instruments, mechanisms and structures tailored to each project circumstances.
Investment below USD $10 Millionwhich solidifies a relationship to key project developer/owner or offers risk-managed returns may be considered. For information on investments below USD $10 Million please contact us.
Equity participation averages 10% of the capital, which equate to a 30-33% of share capital we may acquire. Part of the 10% contribution may be transformed into a loan. Flexible transaction instrumentsare also employed including equity, equity/debt mix, and appropriately structured to the particular project circumstances
Our Debt/Equity capital investment is targeted at advanced project development stages that can demonstrate a strong bankability, and typically demonstrate an IRR achievable of 25% or attractive sector specific growth levels. Debt/Equity structure is adapted on the basis of the terms of material contracts in the feasibility and bankability.
Our often proposed structural finance arrangements are 70:30,debt/equity based.
- Debt (70%) is provided on a 5 to 10-year term.
- Equity (30%) is often split between a foreign investor and a local investor who can become the operator - depending on the arrangements; and also to demonstrate the sense of local ownership.
PROJECT STRUCTURE
Underwritting Criteria
Investocom SA Projects selection and underwriting criteria may also include:
- Location of the proposed project: High probability of market potential and more encouraging if similar investment has already occurred. As long asthe project makes economic sense and benefits the investment destination, we will consider funding it.
- Feasibility:Projects demonstrating financial viability with reasonable assumptions of market potential, the ability to repay Investocom SAand/or its partner(s), credible and realistic profit potentialestimates from the project implementation, are required.
- Quality: Projects with quality design.
- Diversity: Projects that provide a number of options.
- Leveraging Project Investments: Projects that maximize use of public funds such asgrants/subsidies available for development projects, etc.
- Investment Scope: Investments and Finance range from $10 million to $500 million. Smallerinvestments considered with case.
- Due Diligence: As prime determining stage in our investment process; its reviews include market, environmental, site, financial and construction cost analysis, assessment and legal review. It may also include reference checks, reputation, integrity, experience and competence.
- Equity Stake:Investocom will consider taking a minimum 10% and maximum 30% equity stake in the total required capital;the nature and size of the capital guarantee is dependent on considered risks. Instead of loan, we may consider in return a shareholding of minimum 33% to 66%.
- Returns on Investment (ROI): Investments are generally made through our funding facility, with sufficient margin of cost to absorb reasonable variations in business plan, such as costs over-runs.
- Control and Safety measures: Securinginvestment through our finance facility or a pledge of ownership interests may lead Investocom SA to take an active role in monitoring and managing each project invested into, in accordance with terms and conditions contained in the contractual agreements.
