What Is Project Financing?
Project finance is the funding (financing) of long-term infrastructure, industrial projects, and public services using a non-recourse or limited recourse financial structure. The debt and equity used to finance the project are paid back from the cash flow generated by the project.
One of the primary advantages of project financing is that it provides off-balance-sheet funding from the project, which will not affect the shareholders' credit or the government contracting authority and shifts some of the project risks to the lenders in exchange for which the lenders obtain a higher margin. Other examples of project finance include mining, oil and gas, and building and construction. Typically, the financing is made up of debt. Capital stack ranks the priority of different sources of financing. Senior and subordinated debt refer to their rank in a company's capital stack.
We understand that many borrowers/sponsors are experts in their own business area; however, they are unfamiliar with the project finance processes and protocols. Borrowers/sponsors typically need private finance to undertake their project but may not realize the complexities or the level of work involved in securing that finance. That said, poorly prepared projects entering the project finance marketplace, in our experience, stand little or no chance of success. Prospective lenders/funders always favor well-prepared projects that appear to be well-managed and imbue a sense of confidence.
Therefore, we highly recommend that borrowers/sponsors take the time to develop their ideas, concepts, and strategies for the project into a compelling, high-quality, and well-written project business plan that will not only convince us but, eventually, our lenders/funders to provide financing for their projects.
Who Is Our Lender/Funder?
This particular program is with our US-based lender. Our lender/funder is an alternative capital lender. Our flagship lender or funder is a fully qualified US-recognized non-bank lender. They don't operate like a bank. The project financing lender that we work with has an unconventional methodology that most typical borrowers are accustomed to or used to. Their funding model sources are in the placement of structured notes (through investment banks) and our flagship lender. The notes must be investment-grade, determined by the underlying assets (e.g., projects and their investment-grade collaterals. We are interested in "premium grade projects" with premium investment grades, and our lender funds 100% premium projects.
The lender has a unique platform where their processes and protocols facilitate their ability to do what they do. For those who follow their steps, the process is relatively seamless and straightforward, and for those who attempt to customize their steps and alter their protocols to suit their own way of thinking, this is not the place for you. The reason is that the lender is under strict compliance requirements that do not allow them to deviate from the guidelines that they have agreed to and abide by, which also makes the terms and conditions of this loan facility possible.
Please note that only premium projects made it through the term sheet. By premium means US projects or US international projects with premium collaterals. For international locations are narrowed to certain triple AAA jurisdictions. That said, we always preferred US projects, unless collaterals are also premium elsewhere in triple-A countries. For example, we will entertain projects with long-term purchase/sale agreements (e.g., PPA, SPA, offtake agreements in general with an investment-grade rating. Or income-producing US real estate properties (e.g., resorts and hotels with recognized operating agreements with international hotel chains).
Most projects are lost due to the lack of funding or not receiving any funding at all. Thus, we, at Hakim Saya, have the solution for Green Energy Project Funding. We partner with a US-based Private Equity firm, and our Partner has funded many projects around the globe.
We are looking for projects to fund such as Solar, Wind, Biofuel, Biomass, Geothermal, Hydro Power, Energy Storage, Oil and Gas Project Funding, Natural Gas, Carbon Emission Control Projects, Environmental Social and Governance Projects, LNG Projects, Sustainable Real Estate, Hospitality, Water Production and Conversation, Telecommunications, and Infrastructure. We will entertain other industries on a case-by-case basis.
U.S. projects are preferred (our US lender will give priority to U.S. and U.S. International projects - faster to close). We can fund in places like the U.S., Canada, UK, SE Asia, Germany, France, Ireland, Austria, Australia, Japan, South Korea, Belgium, Switzerland, Denmark, Finland, Israel, Luxembourg, Singapore, Malaysia (case-by-case), Thailand, (case-by-case), Poland, Sweden, etc. (Any other premium investment-grade countries).
Currently, in Africa, we do not fund as it is impossible at this point and time. Also, suppose there are U.S. or International Sanctions. We cannot work in those nations (e.g., China, Cuba, Iran, Libya, Syria, Yemen, Somalia, Venezuela, North Korea, Nigeria, Myanmar, Eritrea, Kyrgyzstan, Sudan, Tanzania, Belarus, etc.
Funding Dollar Size:
We work with projects greater than $100 Million and up to $5 Billion (higher is case-by-case).
What Type of Funding That We Do Not Provide With This Alternative Lender?
- Venture Capital, Capital Risk Investment
- Commodities Trading
- Financing of Distress Assets or Operations
- Securities Trading
- Securities' Transactions, Capital Raising, etc.
- Hedge Fund Transactions
- Wealth Management
- Not Broker-Dealers as defined by SEC regulations
We don't charge any upfront fee. Not a penny. However, we charge a consulting fee of 3% of the total gross loan amount for arranging the project financing loan. Our lending partner, a US-based Private Equity firm, also does not charge an upfront fee either, and their success fee is additional to ours and the lender's fee. We only get paid when our clients successfully receive funding from the lenders we introduced.
Please note that projects must have liquidity as project financing structuring costs (e.g., due diligence, investment bank, placement agent, SPV legal structuring, loan structuring, etc.) are incurred upon executing the appropriate legal documents.
In the traditional banking market, the project company/sponsor's money that they already spent in preparation for initiating the projects (e.g., land, R&D, acquiring other assets, etc.) may be taken into account by the banks and considered as "equity contribution" or a "deposit" towards the project company/sponsor's funding. But, even then, the project company/borrower will be expected to cover other related costs.
In alternative capital markets, a powerful form of project financing, the project company/sponsor preceding financial commitment is essential encouragement to the lender. However, there are still costs and charges involved in the project company/sponsor financing. The funder/lender is still expecting to see a contribution from the project company/sponsor. Also, despite the project company/sponsor has already spent thus far, a funder/lender could still turn down the project company/sponsor application if the lender/funder doesn't believe that the management team is up to the job to complete the projects.
Project Minimum Requirements:
We provide alternatives for capital funding creation for Global Energy Projects.
- Project is shovel-ready
- Project Funding Requirement
- Executive Summary
- Detailed Business Plan
- Management Resume (e.g., proven management experience and professional credentials)
- 3-5 Years Pro-Forma/Looking Foward Financial Statements
- Historical Financial Statements (only when applicable, recent 3 years).
- Off-take Agreements (e.g., Power Purchase Agreements (PPAs), etc.)
- Ability to set lending collaterals (e.g., Off-take Agreements, Standby Letters of Credits (SBLCs), Performance Bond, Credit Insurance, Sovereign Guarantees, Sinking Fund Build Up, etc.) depending on our funding partner(s) and project assessment and underwriting.
- Availability of project data assessment (e.g., physical and financial performance, details of costs involved, the market for company's services and products, future prospects, and profitability projections (3-5 years Pro-forma looking forward financial statements).
- Approved EPC Contractor and Contractor Project Proposal (Delivered to the Developer/Project Owner/Promoter).
- Explanation of project adjustments due to COVID-19 global health emergency. Would you please describe the impact on the Projects?
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What Differentiate Us From Our Competitors?
We partner with a US-based Private Equity firm, and we work together to procure project financing through legitimate and exclusive lenders and solely obtain financing for premium projects. We provide funding for more robust transactions that fail to qualify for traditional bank financing. Through our partnerships with the US-based Private Equity firm, we can deliver products that provide the necessary funding for projects. Our flagship lender offers 100% financing, and certain conditions apply (e.g., 50% equity participation, a seat on the board, and other requirements apply).
What Are The Next Steps?
If you have any projects that fit our criteria, contact us about your project, and we shall review and arrange a call to discuss your project(s).
Thank you for considering us for your Green Energy Project Funding. We look forward to working with you.