IBS ENERGY IS SEARCHING FOR A PRIVATE EQUITY OR VENTURE CAPITAL INVESTOR TO DEVELOP READY TO BUILD / TURNKEY PHOTOVOLTAIC PROJECTS
SUMMARY
IBS Energy Srl ( Ltd. ) is a startup, a limited company that deals with the authorizations of new Grid Parity photovoltaic and wind power plants, that is, with no government incentives. In this particular case, investing in a startup has the objective of financing ground – mounted photovoltaic plants until they get to the Ready to Build or Turnkey stage . This implies an investment pitch, writing of an industrial and business plan, legal and financial aid and meetings aimed at the settlement of the investment .
ABOUT US
IBS ENERGY SRL ( LTD. ) Its core business is related to the development of Grid Parity photovoltaics in Greenfield modality . The absence of incentives is the cornerstone of the investment, as in the past they were often revised by the State, posing many problems for the investors . There is only one exception : disused quarries or industrial lands, as sometimes investors expressly ask to participate in public auctions or to subscribe to the registro degli impanti ( register to which one subscribes to obtain incentives ). However, IBS always suggests to proceed once the project is sustainable even with no incentives .
GOAL : GROW THROUGH VENTURE CAPITAL OR PRIVATE EQUITY INVESTMENT FUND
IBS ENERGY, as a startup and owing to its targeted organizational choices, it is an agile company from a structural point of view, deals with scouting and origination of sites and also signed outsourcing contracts, part of the bureaucratic authorization procedure, with engineering companies .
IBS is currently in co – development mode , that is, an investor finances projects depending on the milestones agreed on and corresponding to the pivotal moments of the authorization process .
IBS Energy, in case of an emerging collaboration with a foreign investor who wants turnkey plants, for example, apart from the development they also offer the construction of buildable installations . Therefore, they intend to find an investor who finances through internal financing a SPV, to be created and then capitalised for this purpose, giving part of the shares to the investor .
IBS Energy, once obtained the AU Autorizzazione Unica ( see glossary ), will cede the project to financial traders . This is a very important aspect, mostly when it comes to the private equity investors we are looking for .
IBS Energy will raise capital to launch a new project, which implies an internal capital and therefore a greater flexibility and operation independence. However, this entails more important marginalities for the investor .
In other words IBS Energy, instead of relying on an external investor, they will either use the raised capital to carry on the authorization process of the identified sites and then cede the project once it is buildable, or build a photovoltaic park, as there are bankable companies in the EPC sector that can take care of it ( BOS and O&M ).
Actually it is a different way of carrying out the same activity, however, the funding is not external but internal .
ONGOING PROJECTS
IBS Energy Srl ( Ltd. ) has ongoing projects in different italian regions : Abruzzo, Friuli Venezia Giulia, Lombardy, Lazio, Molise, Apulia, Sardinia, Sicily, Tuscany, Veneto; where there is a demand of connection to the electrical networks, and there are projects at an advanced stage . As there is a continuous scouting of sites and numerous other projects are being signed, numbers are expected to go up week by week .
THE PROCESS
The process is the following :
- IBS performs checks and analysis to determine the site suitability for the installation of a photovoltaic park : electrical simulations, connection costs to the electricity grid, screening ( with restrictions, like national, regional ones ), plant layout, financial simulation and business plan, obtaining a profit expectation of the turnkey plant .
- If the site is eligible , then a preliminary contract is signed with the owners of the lands .
- The site is then presented to an investor, and if the latter is interested, the procedure to the obtaining of the Autorizzazione Unica begins . The first step is a request to the operators of Enel and Terna for connection to the national electricity grid, and the last step is the obtaining of the Autorizzazione Unica, from which the installations and the sale of energy .
In a few words, our activity starts from the scouting / origination of sites phase ( mostly agricultural lands, industrial lands, and disused quarries ) through some collaborators all over Italy . Once the analysis are carried out ( slopes, restrictions, connection to the electricity grid and business plan), we contractualize the eligible areas with the owners through engineering company, getting started with the authorization procedure .
Pursuing the growth objective, we want to diversify the line of business and also carry out a project as a financially independent company, until the ‘’ Ready to build ’’ stage and then cede it to an investor . This will reassure those who want to invest in this initiative/company as this contract makes it possible to figure out revenues ( through a business plan ) along with the costs and the payments procedure .
TEAM
IBS Energy is a company that counts on a skilled Team in the renewable energy sector, and also partners and experts all over Italy that deal with scouting of agricultural lands, industrial lands, abandoned quarries, landfills, coverings .
IBS Energy works with engineering companies with a long – term experience as to the procedures to obtain the authorizations for new photovoltaic, wind power plants and other renewable sources .
IBS Energy signs agreements with investors and financiers to finance the co – development of the photovoltaic stations and, if demanded by the client, also as to construction of turnkey solar parks, ones authorized .
FOR FURTHER INFORMATION :
In case you are interested, send :
- Presentation of the investment
- Revenue account
MORE LINKS :
IBS ENERGY home page
DEVELOPMENT and milestones co – development
Grid parity PHOTOVOLTAIC ; AGRIVOLTAIC, FLOATING PHOTOVOLTAIC
WIND POWER PLANT
CONTACT US
Thank you for the attention
IBS Energy
MORE INFORMATION :
TYPES OF INVESTORS
Private equity investment Private Equity is a financial activity which typically refers to investment funds, usually organized as limited partnerships, that buy and restructure companies not publicly traded .
Venture Capital investment Investors in venture capital put a small percentage of their total funds into high – risk investments . Venture capital is a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential .
Specialized investment fund An investment fund is a collective investment undertaking . It is constituted and managed by an administrative body . This definition is taken from the text of financing according to the Italian legislation . A specialized investment fund focuses its actions on certain sectors, such as the Renewables, for instance .
Family Office Family offices are private wealth management advisory firms . A family office can be a single – family office, supports only one family aid, or a multi – family office / multi – client family office, supports a number of families ; working efficiently both financially and administratively .
TO INVEST IN THE ENERGY SECTOR
Greenfield investment Greenfield investments are a type of foreign direct investment, where a company starts its operation in other countries as its subsidiary and invests in the construction of offices etc.
As to the energy sector, it deals with photovoltaic projects, in which one starts from scratch looking for suitable lands etc. , and after signing a preliminary contract linked to the AU ( Autorizzazione Unica ) one proceeds until the project is buildable . The investor invests in the development since the beginning, and also finances through agreed payment steps according to predefined milestones .
Brownfield investment It is used in foreign direct investments . Unlike the greenfield investment, buildings are already constructed . For example, as to the photovoltaic and the wind power plant, the investor finances the project once this already reached one or more milestones as to the authorization process : achievement of a TICA ( Testo integrato connessione attive : it is a document that states technical – economic terms and conditions for the connection to the grid of electric power production plants . ) /STMG ( Soluzione tecnica minima generale : minimum general technical solution ), achievement of a VIA ( Valutazione impatto ambientale : Environmental Impact Assessment ), achievement of a AU ( Autorizzazione Unica ).
Investing in a Photovoltaic project Ready to Build As the concerned bodies already confirmed their interest and 127 days for anyone who wanted to oppose the construction have passed, it is a low – risk investment . Therefore, the connection to the installations and the consequent electricity production and sale are obstacle – free .
Investing in a photovoltaic project through Autorizzazione Unica : As it is similar to ‘’ Ready to Build ’’, it is a low – risk mode, too . Obviously the higher the risk, the lower the development costs . When the risk is very low, like in this case, the cost of the Autorizzazione Unica is higher .
Investing via SPV ’s A SPV ( special-purpose vehicle ) is a company or a legal entity ( except for banks ) that carries out specific financial activities that will then be transferred to a third party and sometimes with the aim of carrying out one or more securitisation . In this particular case, real estate titles, every agreement signed by the SPV are directed towards this entities . For example : demand for TICA / STMG, etc. The investor, right after creating the SPV, will capitalize it in the building and executive phases of the wind power and photovoltaic plant .
Investing in a Turnkey plant That is, finance a project that obtained the Autorizzazione Unica, which after its publication in the gazette gave the all-clear for the construction, and that through planned works has obtained the connection to the national electricity grid . This investment is possible either by purchasing the buildable project and proceed with the construction or by purchasing the already built asset and connected to the electricity grid . If this investment is done via SPV ’s, there is a higher financial risk and IRR on investment is higher .
Investing in Energy sector stocks The acquisition of shares of a society is not a complex task, however, some precautions should be taken to ensure that the investment is profitable, reducing both short and long – term financial risk . In particular :
1. Expected profit margin
2. The value of the company in the market
3. Financial strategy
4. Purchasing terms
If the company belongs to the energy sector and if its profit motive and mission is the development of photovoltaic and wind power projects, both technical and administrative due diligence must be carried out to ensure that everything has been conducted in compliance with the law .
GLOSSARY AND LINKS :
Investment pitch : a brief pitch, that lasts about 30 seconds, to get investors for a startup or project .
Private Equity : it focuses on generating capital gains . That is, investors purchase a stake in a business, take an active role in its management, and lastly draw a profit from the increate value of the business by selling or floating it .
Venture Capital : startups with a potential to grow need a certain amount of investment . Investors invest their capital with a long – term growth perspective .
Capital investment or capital expenditure ” CAPEX ” : they are funds used by a company to upgrade and maintain physical assets such as property, plants, buildings and more .
Joint Venture ( JV ): a joint venture is an arrangement between business entities, also from different countries, with the aim of carrying out a specific project. Each entity agrees on how to divide up income and expenses .
Financial risk : it is the potential losses of an investor when investing in a business that uses borrowed money . Some financial risks include credit risk, liquidity risk, operational risk . There could be significant losses as well as unexpected profits .
IRR : Internal Rate of Return is a metric which estimates the profitability of potential investments .
Discount rate : makes the actual value of an investment equal to zero and is given by :
Summation ( Rt / ( 1 + IRR ) ^ t )) = 0
Where Rt = Net cash flow during a single period t
ROE ( Return On Equity ): it is a measure of financial performance given by :
ROE = Net income / Shareholders ’ equity * 100
When a company incurs a loss, return on equity is negative .
ROI ( Return on Investment ): Return on investment is a financial ratio used to calculate the benefit an investor receives in relation to their investment cost .
ROI = Net income / Cost of investment
Administrative and technical Due Diligence : investigation and in-depth analysis of datas and information relating to what is being negotiated . In case of a photovoltaic project, it can be either ‘’Administrative ’’, aimed at verifying the accuracy of the agreements, legal ownership of tangible and intangibile assets, or ‘’ Technical ’’ if it is aimed at verifying all the requirements that a photovoltaic system demands . For example, costs of connection to the electricity grid, national, regional, local planning constraints, bankability of the agreements and purchase of lands or sites being negotiated, etc.
Ready to Build : a permit that will allow the building and the start of works on site, in this particular case of photovoltaic and wind power plants .
Autorizzazione Unica : an authorization which constitutes the necessary and obligatory title for the construction and commissioning of PVs . It was first introduced by article 12 of the Italian Legislative Decree of 2003 no. 387 .
Grid Parity : grid parity occurs when alternative energies generate power that costs less than, or equal to, the price of power from the electricity grid .
Milestones : It is usually used in subjects such as project development and engineering . It is a point in time within a project life cycle which measures the progress of a project .
Government incentives : in this particular case linked to renewable energy ( photovoltaic etc) and represent the remuneration given by a public body or state entity for the production of clean energy .
GSE ( Handler of energetic services ) : it is an italian Joint – stock company, 100 % overseen by the Italian Ministry of Economy and Finance .
BOS ( balance of system ): refers to the components and equipment that transfer the energy produced by the solar panels in the national electricity grid . The efficiency of the modules will allow the conversion of solar energy into electricity without excessive efficiency losses . With ‘’ BOS ’’ we also refer to the verification of the system once built and connected .
WI-FI : a wireless local area network that uses radio waves to connect computers and other devices to the internet .
O&M ( operations&maintenance ): it refers to the daily operations, the activities needed to preserve an asset : in this particular case, of the photovoltaic and wind power plant .
TICA ( testo Integrato delle connessioni attive ) : Literally Amalgamated law of the active connections . It is a document that states technical – economic terms and conditions for the connection to the grid of electric power production plants . In the case of Enel, this is a document which also indicates the connection costs, the 30 % fee to be paid during the acceptance of the estimate and the balance .
STMG ( soluzione tecnica minima generale : general minimum technical solution) : it is a document that defines the connection criteria for photovoltaic systems above 1 kWp up to large plants .
VIA ( valutazione di impatto ambientale : environmental impact assessment ): it is a process of evaluating the likely environmental impacts of a proposed project ( in this particular case of a photovoltaic or wind power plant ), which will either get accepted or rejected by the competent authorities .
AU ( Autorizzazione Unica )
Authorization procedure, depending on the case it can be :
- Autorizzazione unica issued after a procedure, in compliance with the modalities established by the Law and it applies to plants > 999 KW .
- Authorization for plants FER that implies an analysis of the authorization procedures concerning the construction and operation of power plants .
- To inform the Municipality and fulfilments to make the authorization procedure for the production of energy up to 999 KW or for the installation of panels on roofs easier .
Environmental and urban planning constraints :they are restrictions and limitations on the free use of land or of a private property . They can be landscape restrictions, but also hydrogeological, archeological restrions etc.
FER : as to the photovoltaic, FER, FER 1 and FER 2 decrees refer to the installation of plants > 20 kWp . New or fully constructed or reactivated plants < 1 MWp . Enel : Enel S.p.a. is an italian multinational distributor and manufacturer of electricity and gas, both in Europe and all over the world .
Terna : An Italian electricity grid operator . With more than 74.000 Km high voltage lines operated, they play a central role .
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