112 Energy Project Financing: Resources and Strategies for Success
- Inseparability of Financing and Services. In a bundled services
agreement, the terms and conditions of the financing must be
separable from those of the technical project in order to success-
fully monetize the transaction. - Failure to Include Key Capital Markets Provisions. Documents
without the previously discussed critical provisions, such as lender
assignment rights, security interests in the equipment, hell or high
water payment obligations, etc. will be poorly received by the
capital markets.
CONCLUSIONThe capital markets have an unlimited capacity to fund creditwor-
thy, properly structured energy services transactions. By being aware
of investor requirements and working collaboratively with a knowl-
edgeable and experienced financing partner from the earliest stages of
a project, energy services companies can avoid costly project delays,
maintain competitive advantages, meet or exceed customer expecta-
tions, avoid leveraging their balance sheets, and gain broad access to
the capital markets to fund their bankable projects.
This material is the work of the individual author and is presented
for informational purposes only. This work does not represent the for-
mal opinions or positions of Banc of America Leasing & Capital, Bank
of America, N.A. or Bank of America Corporation including any of its
subsidiaries and affiliates. Readers are strongly encouraged to consult
their own independent tax, legal and accounting advisors when entering
into any financing or investment transaction.