Our clients were beef hill farmers who had secured a feed-in tariff for a 600kW high-head run-of-river hydro power plant on their land in Scotland.
They had offers of finance, provided they gave up a large portion of the shares in the project, however our client understandably wanted to retain full control of an asset expected to run for the next 100 years. Fortunately, our team has substantial experience of hydropower and was quickly able to confirm that the project was in a good catchment area, with a simple construction process.
As a result, we crafted a simple loan arrangement, that didn’t incur the cost of a typical project finance structure. Although the value of the client’s land was insufficient to sign-off a loan for the whole project, we created a staged payment process that recognised the increasing value of the project as each step of the construction process was completed.
Once the project was operational, the client secured a low cost long-term loan from the high street and repaid our loan early, penalty free.