TrustEE standardises project assessment and financing
Any company that wants to be successful in selling industrial solar heat solutions to end users and investors needs standardised project assessment and advanced risk management. To develop such processes is one of the main objectives of the subgroup Guideline to Market of the IEA SHC Task 64 Solar Industrial Heat. The EU-funded project TrustEE is one pathway to address these challenges by a semi-automatic project assessment platform and new risk management. The key is to reduce the risk for all three stakeholders – industrial end-users, technology suppliers and financial investors.
Chart: TrustEE
“TrustEE allows us to cut transaction costs by applying a semi-automatic project assessment model,” explained Jürgen Fluch, project leader of TrustEE at AEE INTEC and co-chair of Guideline to Market. As a first step, technology suppliers or end users that want to get access to innovative funding for energy efficiency or clean energy (EE or RE) projects need to provide financial and technical data. This is done via an online platform, fulfilling all data security issues as design, operation and expected performance data are shared with TrustEE (online platform in German: https://finplace.eu/eef/trustee).
The next step is then an automatic consistency check of the delivered data via a comparison with gained results from a background simulation. “If project data is within a certain range, it is seen as bankable and we will sign a financing commitment together with the applicant,” said Fluch. This commitment states that if the relevant EE or RE measures are implemented successfully, TrustEE will take over responsibility for financing the project based on a well-defined schedule of instalments.
Stages of a TrustEE-funded project: (1) framework agreement, (2) platform-based assessment and purchase contract, (3) project implementation, and (4) acquisition of receivables
Chart: AEE INTEC
At that point, the innovative refinancing scheme developed by Reenag will come into play. “Our business model is to purchase long-term receivables from technology suppliers once their customers confirm that projects have been commissioned successfully,” noted Winfried Braumann, Managing Partner at Reenag. In short, the applicant sells to TrustEE the claims it has against an end user according to a regular payment plan.
The receivables are subsequently converted into tradable securities, which will be offered to investors on the capital market. “We have already signed contracts with two investors,” said Fluch, “though more are always welcome.” Currently, TrustEE is also looking for well-developed solar heat, biomass, biogas and energy efficiency projects for industrial end-users.
Braumann explained that by lowering risk, TrustEE’s forfaiting-based financing approach has great appeal for all three stakeholders involved: “We are ready to pursue this approach further in the context of IEA SHC Task 64,” he said at an online meeting of the Guideline to Market research group in mid-October.
The main aim of the group is to provide market players with service-related information on industrial solar heat. Major objectives are:
- Identify and sum up available support schemes that include industrial solar heat applications.
- Get the financial sector to further knowledge of industrial heat project funding on both sides.
- Create several key competitiveness indicators to assess existing and scheduled SHIP projects.
Those interested in following and attending can contact Jürgen Fluch and Peter Nitz for more information: j.fluch@aee.at and peter.nitz@ise.fraunhofer.de.
Organisations mentioned in this article:
