Investment consulting as a specialized type of consulting in various areas of investment activity contains the potential to increase the efficiency and competitiveness of capital-intensive projects.

Successful investment activities of companies in a highly competitive business environment require competent specialists and modern technologies.

CP Finance UK Finance investment consulting and advisory services include, but are not limited to:

• Analysis of investment projects.
• Development of a detailed business plan.
• Financial modeling and forecasting.
• Providing long-term business financing on flexible terms.
• Consulting and project support at all stages.

If necessary, together with international partners, we carry out engineering design, construction, purchase and installation of equipment on the terms of an EPC contract (turnkey).

Thus, our team is ready to offer clients a full cycle of professional Investment consulting service, from a business idea to a finished object.

We actively cooperate with large companies in dozens of countries around the world, including Spain, France, Germany, Brazil, Mexico, Saudi Arabia, South Africa and others.

Reasons to use investment consulting services

The work of an investment consultant is related to the process of assessing risks and investing resources in such instruments that can bring the greatest return.

They are hired by banks, brokerage firms, investment funds, large multinational corporations, SMEs and private investors.

Close cooperation between the investor and the investment advisor, including the mutual exchange of information and ideas, can help analyze the financial situation and indicate the best paths for a successful investment.

Let us repeat that the investor makes the final investment decision by agreeing to a certain risk and based on the expert’s recommendations.

Investment consulting services are highly individualized, so the portfolio of assets that an investor builds with the support of a consultant will always be unique.

The main responsibilities of an investment advisor include the following:

• Advising private clients on various instruments.
• Investment portfolio management using optimal financial instruments.
• Advising companies on mergers, acquisitions and changes in the capital structure.

An investment consultant primarily performs tasks related to the conclusion of contracts for the provision of his services through the intermediary of an investment company or to ensure the execution of such contracts.

The consultant also receives and transmits orders to buy or sell securities or rights to participate in collective investment institutions on behalf of its clients.

There are many very important issues for clients to consider when preparing for an investment, and it can be costly for an investor to skip any of the pieces of this puzzle. For this reason, it is very important to consult with experts, because this area is very wide and complicated.

The services of investment advisers can be used by companies and individuals who do not have experience or knowledge in the field of investment and have free financial resources that they would like to invest with an acceptable return.

Naturally, investment consulting services come with additional costs, but from the point of view of possible potential benefits or avoidance of large losses, this is certainly a well-invested money.

When looking for an investment consulting firm, experts are recommend to choose one with reputation and solid experience in the given field.

A good investment advisor is able to intelligently manage the capital entrusted to him by a client unfamiliar with the financial markets. In addition, the consultant has some responsibilities under local investment laws. If the investment advice does not meet the standards, the advisor can be held liable for losses incurred by the investor based on his incorrect advice.

Investment consulting services for potential investors

In a broad sense, investment consulting is professional services related to the selection of suitable financial instruments and investment objects for clients in various fields of activity, from financing the real sector of the economy to financial assets.

An investment advisor selects assets for his clients that are worth investing in, based on an analysis of the client’s financial situation and goals.

First of all, this specialist provides detailed recommendations for informing the investor and describing the mechanisms of operation of a certain investment product, including determining the level of risk, time horizon or determining the planned rate of return and initial payment.

In addition, it provides professional services for managing the financial flows of investment projects and offers other services for large businesses:

• Investment project management.
• Preparation of investment memorandum for partners.
• Development and expert assessment of investment projects.
• Analysis and monitoring of investment projects.
• Development of detailed business plans for projects.
• Financial risk management.
• Project support from A to Z.
• Fundraising, etc.

Despite the broad capabilities of investment advisory service providers, the final investment decisions remain with the client, and the advisory service does not create any obligation.

Investment consulting belongs to the category of brokerage services. Activities in this area are strictly regulated and limited by the national legislation of a particular country, and in different countries investment consulting may have unique features and limitations.

In particular, the provision of such services may require a special license. Thus, the provision of any paid or free advice and recommendations in relation to stocks or bonds or units of investment funds can only be carried out by licensed organizations (companies).

Fundraising: attracting investments for large business

Fundraising, or raising funds for investment projects, is considered a popular investment consulting service today.

Arranging financing for a business project is a long, complicated and expensive process, which nevertheless does not give a 100% guarantee of success for each proposed project.

Fundraising in business consulting means a set of consistent activities to find and attract investors. Therefore, some consulting companies define this service as investment financing.

A good investment advisor comprehensively justifies the use of various instruments and methods of financing and develops an optimal financial scheme.

This is influenced by the following factors:

• Terms of implementation of the investment project.
• Project type and current industry specifics.
• Specific stage of the project cycle.
• Taxation system in the host country.
• The structure of the company’s assets.
• Capital market, etc.

In all cases, the purpose of this activity within the framework of investment consulting services is to raise capital on favorable terms for the customer using such instruments as long-term loans, issue of shares, leasing instruments, etc. Often these tasks are solved by project financing instruments (PF).

Financing an investment project should provide the following effects:

• Attraction of sufficient funds for the project as a whole and for each stage of the investment cycle in accordance with the schedule of their implementation.

• Minimization of risks and costs of project participants, each of whom strives to obtain the greatest benefit and has its own requirements for the results.

The greatest interest in attracting investors arises at the stages of launching a company (project) or its rapid growth. Consulting companies have huge databases of potential investors, understand their profile and strategy. Potential investors also use these contacts.

Types of investors and strategies for raising funds

The investor’s goals are always formulated through the development of a clear investment strategy or investment plan, following which in the long term should lead to the achievement of goals. The investor achieves these goals by acquiring various assets for a certain period.

The investment process includes the following stages:

1. Search and purchase of a profitable asset.
2. Receiving income for the period of ownership of the asset.
3. Search for a new buyer of the asset.
4. Sale of an asset.

Income for the investment period consists of regular income for the period of ownership of the asset and the final income as a result of changes in the market value of the asset:

• Passive investment strategy: the investor’s activity ends with the acquisition of an asset, after which he receives dividends or profits (the so-called “buy and hold” strategy).

• Active investment strategy: the investor is interested in the growth of income and capitalization of the asset (increase in value over time). In this case, the investor seeks to get more money from the growth in the value of his asset, tracking changes in value and being ready to sell it at any time.

Different types of investors have different motivations and goals for participating in the project, they are attracted at different stages of the project cycle.

Thus, depending on the type of project of the life cycle stage, the goals of the investment rounds differ.

It is important to take these stages into account when developing strategies for attracting funds for large business, since these strategies must fully fit into the investor’s understanding of their financial interests at each stage and its duration.

It is important not to limit the activity to the search for an investor of the appropriate profile.

In the case of financing large projects, we are talking about a comprehensive service, including the search for investors or lenders for the project, the development of an attractive proposal, the organization of effective communications, the development of a financial model, etc.

Finding a provider of capital in investment consulting is only the first step to the success of a project. The second step depends on the appropriate preparation of the project and the team for attracting investments (presentation and communication). The main task of a consultant when organizing an investment round is to create balanced mechanisms to protect the interests of the parties in the long term.

From the point of view of real sector companies, investment consulting is focused on finding and attracting financing for investment projects. From the point of view of a potential investor, these services represent a professional search, formation and management of an investment portfolio that best suits the profile of a particular investor.

In this section, we consider investment consulting from the point of view of a large business that needs to attract financing and manage financial flows in the framework of investment projects.

If you are interested in financing your project in the EU or abroad, contact the experts of CP Finance UK Finance for more information.

Renewable energy investment in Germany is growing mainly in solar and wind power sectors, which form the backbone of the energy security and sustainability of Europe’s largest economy.

Germany has been a global leader in renewable energy adoption and investment for a long time.

Country’s total renewable energy production has increased from less than 100 TWh in 2009 to 256 TWh in 2022, and this figure continues to grow. Recent geopolitical changes have given a powerful impetus to the RES development, requiring to reduce dependence on imported hydrocarbons.

CP Finance UK supports the development of modern energy projects throughout Europe, including Germany. Our team offers financing for the construction and modernization of solar power plants, wind farms, hydroelectric power plants and geothermal projects.

We are ready to facilitate obtaining long-term bank financing and attract a large investment loan from private investors for your ambitious plans.

Contact us to find out more.

Renewable energy sector in Germany

The renewable energy investment in Germany has been a key focus area for the country’s transition to a low-carbon economy.

With vast and diverse natural resources, this country prefers to develop solar power plants and large wind farms as the most technologically advanced and affordable sources of green energy. New geothermal technologies are also actively developed and researched here.

According to recent global reports, Germany is not among the world leaders in the development of renewable energy, behind countries such as the United States, China, Brazil and India in terms of absolute installed capacity added. However, Germany has been considered a leader in specific renewable energy sectors. For example, it has been at the forefront of wind energy installations, both onshore and offshore, and has made significant investments in solar photovoltaics.

Germany has a strong agricultural sector that plays a crucial role in the country’s economy.

No wonder that Germany has also a large bioenergy sector, including biomass, biogas, and biofuel production.

This sector has created investment opportunities in areas such as biomass sourcing, biogas plant operations, and biofuel manufacturing.

Germany has implemented various incentives to support the growth of renewables. The Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz, EEG) guarantees feed-in tariffs for renewable energy producers, providing long-term investment security. The government has also set targets for the share of renewable energy in the total energy mix, aiming for 65% by 2030 and 80% by 2050.

The growth of the renewable energy investments in Germany has led to the creation of thousands jobs. According to the Federal Ministry for Economic Affairs and Energy, the renewable energy industry employed around 290,000 people in 2020. These jobs span across various segments of the sector, including manufacturing of electrical equipment and components, engineering, installation, operation and maintenance services.

Germany’s commitment to renewable energy has not only reduced its reliance on fossil fuels but has also positioned the country as one of European leaders in clean energy and sustainable technologies.

The ongoing transition to renewable energy investment in Germany has attracted large investments, driven capital-intensive innovation, and contributed to the country’s efforts to combat climate change.

Wind energy sector development in Germany

With around 30,000 wind turbines across the country, both offshore and onshore, Germany is one of the European leaders in wind power investment.

It is a significant contributor to country’s RES mix.

Germany has historically utilized a very effective and flexible feed-in tariff system to incentivize investment in RES sector, including wind power. Under the EEG, wind energy producers receive guaranteed payments for the electricity they generate. The feed-in tariffs are set based on various factors such as project size, location, and technology.

The country has invested heavily in the construction of offshore wind farms in the North and Baltic Seas. At the end of 2022, Germany’s offshore wind park had over 1,500 turbines with a total installed capacity of over 8 GW. Previously, German government has set a target of installing 20 GW of offshore wind capacity by 2030 as part of its efforts to achieve an energy transition.

Germany has a substantial onshore wind capacity as well.

The Federal Network Agency (Bundesnetzagentur, BNetzA) reported that by the end of 2020, the onshore wind capacity in Germany was approximately 54 GW.

There are tens of thousands of wind turbines all over the country, especially in the flat regions with rich wind resources in northern Germany.

For example, Lower Saxony (Niedersachsen) is considered the largest onshore wind power region in Germany. It has a diverse landscape that includes flat areas, hills, and coastal regions, making it favorable for wind energy production. The region has a very high concentration of onshore wind turbines, particularly in areas such as Aurich, Emden, and Wilhelmshaven.

Here are some of the largest wind farms in Germany with their installed capacities:

• EnBW Hohe See and Albatros wind farms. These offshore facilities consist of 87 wind turbines, which are located in the North Sea close to each other and about 100 kilometers from the coast. With a total installed capacity of 640 MW, both power plants generate 2.5 billion kWh of energy annually, enough to power more than 700,000 German households.

• Amrumbank West Offshore Wind Farm. Situated in the North Sea, Amrumbank West Offshore Wind Farm has an installed capacity of 302 MW. It consists of 80 wind turbines and is operated by E.ON. The wind farm began operations in 2015.

• Gode Wind 1 & 2 Offshore Wind Farms. Located in the North Sea, Gode Wind 1 and Gode Wind 2 are adjacent offshore wind farms. Gode Wind 1 has an installed capacity of 330 MW, while Gode Wind 2 has a capacity of 252 MW.

• Riffgat Offshore Wind Farm. Located in the North Sea, the Riffgat Offshore Wind Farm has an installed capacity of 108 MW. It consists of 30 large wind turbines and is operated by EWE AG. The wind farm began operations in 2014.

• BARD Offshore 1 Wind Farm. BARD Offshore 1, situated in the North Sea, was one of the first commercial-scale offshore wind farms in Germany. It has an installed capacity of 400 MW, consisting of 80 wind turbines. The wind farm began operations in 2013.

• Alpha Ventus Offshore Wind Farm. Alpha Ventus in the North Sea was Germany’s first offshore wind farm. It has an installed capacity of 60 MW, generated by 12 wind turbines. The wind farm was commissioned in 2009 and serves as a test field for new technologies.

Germany has transitioned to an auction-based system for allocating wind energy projects.

Since 2017, offshore and onshore wind projects are awarded through competitive auctions. This shift has led to cost reductions in the sector and increased efficiency in project development.

Germany has also been focusing on repowering, which involves replacing old wind turbines with newer and more efficient ones. Repowering investment projects contribute to increasing the overall capacity and optimizing the energy output of wind farms. By repowering existing sites, country aims to maximize the potential of wind energy resources in several years.

As the wind energy sector expands, Germany faces challenges in integrating renewable energy into the grid effectively.

The country is investing in grid infrastructure upgrades, energy storage solutions, and demand-response mechanisms to manage the variability of wind energy generation.

Thanks to huge private investments and government support, Germany has become a global leader in wind energy technology and has successfully exported its expertise and technology to other countries. Local companies are involved in manufacturing wind turbines, components, and providing consulting services for wind energy projects worldwide.

Germany is home to prominent companies that manufacture turbines and wind power equipment. Below we have listed several major wind energy equipment manufacturers based in Germany.

• Siemens Gamesa Renewable Energy. Siemens Gamesa is a leading global provider of wind turbines and related services. The company manufactures onshore and offshore wind turbines ranging from 2 to 15 MW. Siemens Gamesa has a significant presence in the wind energy market and is involved in projects around the world.

• Enercon GmbH. Enercon is a company specializing in the production of onshore wind turbines. It offers a range of turbine models, including direct-drive and gearless turbines. Enercon is known for its innovative technology and has a substantial market share in Germany and internationally.

• Nordex Group. Nordex is a global wind turbine manufacturer headquartered in Germany. The company produces onshore wind turbines with capacities ranging from 2.4 to 6.0 MW. Nordex has a strong presence in Europe and other international markets and offers a comprehensive range of wind energy solutions.

• Senvion SE. Senvion is a large wind turbine manufacturer that provides onshore and offshore wind turbines. The company offers a wide range of turbine models suitable for various wind conditions and project sizes. Senvion focuses on technological advancements and has a strong presence in the global wind energy market.

Germany continues to invest in research and development to enhance wind energy technologies.

Advancements in turbine design, improved efficiency, and grid integration solutions are among the most important ongoing research areas. Innovations such as floating offshore wind turbines and hybrid renewable energy systems are being explored to expand the potential of wind energy.

For example, Leibniz University Hannover hosts the Institute of Turbomachinery and Fluid Dynamics, which conducts research on wind turbine aerodynamics, rotor blade design, and wind energy system optimization. The TUM Department of Mechanical Engineering has a dedicated Wind Energy Research Group that conducts research in turbine aerodynamics, control systems, and wind farm optimization.

RWTH Aachen University, University of Stuttgart, and University of Oldenburg are also actively engaged in research and development in the field of wind energy.

Germany has a powerful waste-to-energy sector (WtE), which involves the conversion of municipal solid waste and industrial waste into electricity and heat. Waste incineration plants equipped with energy recovery systems play a crucial role in country’s renewable energy production.

Germany has limited geothermal resources compared to other countries, but it has been steadily investing its geothermal sector. Geothermal energy utilizes heat from beneath the Earth’s surface for electricity generation and heating. The focus in Germany is on the so-called deep geothermal energy, which involves drilling deep wells to access hot water or steam. Several geothermal power plants and district heating systems are currently in operation.

If you are interested in the development of a new renewable energy investment in Germany, our company is ready to assist your business at all stages.

We offer long-term financing for the construction of power plants and energy infrastructure in Germany, as well as provide a full range of professional management, engineering and financial consulting services.

Contact the CP Finance UK for more information.

CP Finance UK FINANCE LIMITED
Website:https://c-pfinanceuk.com/
E-mail:finance@cpuk-financeltd.com
Alt-Email:admin@cpukfinanceltd.com

The management of a large business, its investment activity, expansion and development are increasingly determined by a correct understanding of the changing external environment and the adoption of the profitable decisions in investment consulting services in large projects by top management.

To survive in a competitive environment, every company must skillfully manage its resources.

Successful investment activity refers to the constant search and implementation of new projects, since the lack of progress not only worsens the company’s financial results, but also causes a general deterioration in business due to the inevitable decrease in the competitiveness of the products and services provided. For this reason, the use of advanced tools for collecting and analyzing information, as well as innovative financial modeling and decision making, is the key to the survival and long-term prosperity of companies in the face of growing competition.

CP Finance UK brings together a team of experienced finance and investment experts who provide professional investment consulting services for large projects.

We also offer long-term loans, organize project financing schemes and manage large projects around the world.

Investment consulting services in large projects: Principles and decisions

The multi-stage process of planning and implementing a large project is burdened with a high level of risk due to constant changes in the external environment.

Long-term investments require freezing a part of the company’s capital for several years and usually involve certain restrictions during the development and operation phase.

Experts note the high level of complexity of investment decisions related to the construction of large facilities, especially industrial facilities and energy infrastructure (for example, solar power plants).

Such projects are particularly complex and multifaceted, and the range of stakeholders can include dozens of companies and financial institutions, in addition to thousands of potential customers. All decisions related to such investments are subject to the risk associated with the uncertainty of financial, macroeconomic and legal factors that can change in the long term and adversely affect project participants.

Investments in fixed assets are associated with limiting the effects of asset depreciation and ensure the gradual replacement of aging equipment.

This, in a narrower sense, is a necessary condition for maintaining existing production capacity, which also allows for an increase in production volumes if necessary.

Investment decisions may also involve long-term or short-term investments in financial instruments of other entities in order to obtain control over them or additional benefits in the form of a part of their profits. An alternative form of investment could be lending to companies, which is an example of an investment decision with a clear financial component.

Investment decisions are among the most important activities of companies, which determine the basis of their functioning.

Their principles include the following:

• Irreversibility. Once decisions are made, they end up with losses or profits, and the business does not have real options to quickly correct the wrong decision due to the long-term investment planning horizon.

• Scale. An investment project can contribute to the successful development of a company or the deterioration of financial health up to bankruptcy due to a long-term freezing of significant resources. Investments involve significant costs, which limits the possibility of making alternative decisions on the allocation of funds to other projects.

• Risk. All major projects are burdened with high external and internal risks due to their complexity and dynamically changing environment. This requires the use of professional investment consulting services during the planning stages in order to reduce the level of uncertainty.

Any large project, including investment, must be considered by the participants in several planes in terms of scale, financial needs, as well as the complexity and goals to be achieved. In practice, this makes it impossible to standardize project planning.

Each investment is unique and requires customized financial and organizational solutions.

Since the implementation of an investment project is a long process, full of various unexpected situations, it is recommended to first determine and constantly optimize the resources necessary for its successful implementation. These resources include the knowledge, skills, experience and collaborative efforts of people, facilities and equipment, information, technology and funds.

This feature of investment projects requires the application of various complex evaluation methods in order to correctly assess their limitations, risks, cost, profitability or expected payback period. The more factors to evaluate and the wider the time horizon of the project, the more difficult it is to make the right decision.

Obviously, Investment consulting services in large projects are becoming a necessity the global investment world.

Decision making in investment consulting of large business

Making an investment decision requires the development of a professional plan, as well as the widespread use of up-to-date market information, taking into account the conditions of activity of a given business entity.

In order for the decision to start or stop investing to be completely rational, it must be preceded by the following activities:

1. External and internal analysis and reporting.

2. Evaluation of the project by static and dynamic methods, taking into account the change in the value of money over time and subsequent analysis of the results.

3. Selection of optimal methods for assessing investment risk to identify potential threats that affect the profitability of the project.

Major investment decisions should always be made incrementally, using a project-specific step-by-step model. In practice, the investment process is usually based on the individual approach of the investor, which increases the risk of not achieving the initial goals of the project. A careful step-by-step approach allows project participants to avoid serious procedural errors that can significantly reduce the profitability of an investment project or even lead to its failure.

Investment decisions are closely related to qualitative analysis and selection of investment projects.

They are regarded as one of the most difficult business decisions for the following reasons:

• High financial costs.
• Prolonged capital freeze and reduced liquidity.
• Relatively high investment risk.
• High dependence of the project on good planning.
• Introduction of immature / risky technologies.
• Uncertain investment outcome.
• Long implementation period.

The accuracy of investment decisions has an impact on the competitiveness of a business, its market share, as well as its ability to generate income.

Wrong decisions regarding the type, size or structure of asset investments can result in limited liquidity and reduce the flexibility of a company’s operations. In extreme cases, this means big financial problems, even the bankruptcy of the investment project and its participants.

In general, each decision in investment consulting should reflect the choice of the optimal business development program, created taking into account available resources and possible development directions, as well as related investment projects.

An important role in making investment decisions is played by the process of investment planning, within which there are several stages:

• Investment initiative.
• Formulation of the investment problem.
• Definition of performance criteria.
• Identification of potential constraints and risks.
• Search for available investment project options.
• Comparative evaluation of options.
• Choosing the most suitable project.
• Search and attraction of financing.
• Project implementation.
• Control.

An important role in this process is the high competition for financial resources and limited access to external sources of financing.

When attempting to raise borrowed funds, participants must be fully convinced of the appropriateness of these investments. At the initial stage, an analysis should also be carried out, which will confirm the legitimacy of attracting resources to a specific project.

Investment decision factors for large projects

Investment decisions are long-term.

When considering them, it is necessary to take into account the influence of many factors.

Firstly, these are potential incomes, which depend on the demand for a particular product.

Secondly, financial costs, which are associated, among other things, with interest rates.

Finally, the investment expectations of participants and partners should be taken into account.

External factors determining investment decisions:

• Demand for the goods/services of the future enterprise, which can be estimated based on the official GDP forecasts of the host country and target markets.

• The economic situation of the host country and the investment climate.

• Availability of natural, financial, technological and human resources.

• Current and potential competition in the domestic and foreign markets.

• State policy: monetary, tax and investment policy, regulation of special economic zones, opportunities for depreciation of fixed assets, customs legislation, etc.

• The openness of the economy, including foreign trade, the movement of capital and human resources, the country’s participation in international trade and financial systems.

• Formal barriers to investment, such as import restrictions.

Among the external factors influencing the development of investment projects, the most important are expected demand, the cost and availability of external capital, as well as government tax policy, investment legislation, interest rate and exchange rate policies.

Factors that negatively influence investment decisions include high inflation and interest rate fluctuations. Inflation expresses the level of uncertainty in the economy and does not contribute to the efficient allocation of resources. Interest rates affect investments by changing the cost of capital.

Internal factors that determine investment decisions include the following:

• Availability, mobility, productivity and profitability of the resources of the companies participating in the future investment project.

• Access to external resources needed to meet project needs.

• Level of organization, management system and organizational culture, including knowledge and ability to collaborate effectively with other players.

• The ability of managers to adapt the company to the high variability of the environment.

• Opportunity and propensity to invest.

Internal factors that are of great importance for making investment decisions include the degree of utilization of production facilities and other available assets, the willingness of top-management to invest and the current financial health of the business.

So, what should be considered when making investment decisions? All factors can be grouped into external and internal, inherent only to certain types of projects. These determinants are included in investment models and cash flow models.

Making decisions about business modernization:

Projects that involve the modernization or expansion of an existing enterprise have some peculiarities.

They should be taken into account when making investment decisions.

A specific type of investment projects is the modernization of existing enterprises or the expansion of production capacities. Modernization is expensive and requires serious capital investments to improve the efficiency of equipment, train employees, attract external professional consultants to organize the further operation of the enterprise.

The reasons for the modernization of a production / energy facility may be the following:

• The desire of companies to develop and conquer new markets.
• The need to improve quality and reduce production costs.
• Changing the profile of the enterprise, diversification of production.
• The concept of increasing efficiency through innovative technologies.
• Environmental considerations, etc.

Investment consulting services in large projects are important element that ensures the development of existing economic entities.

Usually they are associated with the improvement of the processes occurring within these subjects, and leading to an increase in the efficiency of the management of available resources.

The purpose of making investment decisions to modernize / expand a business is to find better solutions in terms of production capacity, production methods and management systems. On this basis, companies can achieve a more favorable balance between costs and economic effects.

These actions are most often forced by changes in the external environment, such as changes in supply and demand, increased competition, or technical progress. For this reason, modernization projects, as a rule, are aimed at improving the organizational, economic, financial and technical structure of a particular enterprise to levels that correspond to modern realities.

From a practical point of view, the project for the modernization of a large company is subject to the same principles as any investment project, however, it requires a more detailed study of a number of elements of a feasibility study and other documentation.

What should be considered when making an investment decision for modernization?

On the one hand, technical processes and areas for future modernization are subject to a detailed assessment. On the other hand, each of these areas should be studied professionally for weaknesses that require immediate improvement (expansion) and the choice of the best ways to implement the project.

A plan of short-term corrective measures related to the implementation of reorganization or restructuring processes in certain functional areas of the enterprise harmoniously fits into the decision-making process.

Based on these and other plans, financial documentation is being developed to attract project financing with the participation of investors and credit institutions.

Unlike new investment projects, modernization or expansion projects may include investments aimed at introducing targeted changes that will allow the implementation of new development concepts while maintaining current production levels, costs, technologies and assets.

In the case of large enterprises, it often happens that even the best greenfield projects cannot replace perfectly prepared and organized modernization projects. This is recognized by business owners, investors, and financial institutions, who often consider modernization as the only alternative to bankruptcy and an opportunity to repay a loan or return invested capital.

Professional services in the field of investment consulting services for large projects

Experts in investment consulting help corporate clients systematize and simplify the process of making strategic decisions.

A thorough study of the current situation and market development forecasts allows professional teams to develop optimal recommendations for each project.

The participation of external experts and consultants in project preparation is important. As investments become more complex, competition and business demands increase, more and more participants in the investment process are interested in accessing appropriate investment consulting services or technical assistance.

This can positively affect the profitability of projects.

Investment consulting services in large projects can be offered at several levels:

• Government: Many governments and local governments develop government programs and develop industrial policies.

• Development Funds: Public and private agencies and Structural Economic Development Funds help companies search for large investment projects, build investment portfolios and prepare documentation.

• Commercial banks: these financial institutions provide due diligence on projects (verification of legality of funding and credit rating); they also finance the fixed and working capital of the initiators.

• Development Banks: Specialized banks act as investment consultants, evaluate investments from a banking point of view, calculate the profitability of projects and carry out financial modeling.

• IFIs: Major international financial institutions such as the World Bank are active in investment consultanting services, either directly or through local and international companies.

• International consulting companies or consultants: These entities are recruited for pre-investment research, management training, assistance in the creation and development of local projects.

A critical factor in the success of an investment decision is the right choice of consultants.

It is no secret that in many cases the quality of consulting services, including the quality of documentation prepared by consulting companies, leaves much to be desired. Despite this, the hiring of experienced experts or experts is most often useful and necessary for the preparation and implementation of a large project.

Leading consulting firms have at their disposal significant resources of macroeconomic information, including up-to-date statistical data that are not publicly available. In addition, they have extensive financial, economic and legal knowledge and competencies, as well as use invaluable experience and business contacts for the benefit of the client, which can maximize the effectiveness of investments and their economic impact.

CP Finance UK is a Jersey company with rich international experience in investing and supporting large projects. Together with respected partners, we helped implement environmental, energy and industrial projects in countries such as Spain, Germany, France, Mexico, Brazil, Saudi Arabia and others, gradually expanding the geography of our presence.

Our services for large businesses include, but are not limited to:

• Investment design and consulting.
• Development of a feasibility study and an information memorandum.
• Management of the company’s investment strategy.
• Professional evaluation of investment projects.
• Providing long-term loans.
• Refinancing, etc.

Are you looking for a long-term loan for a new project?

Do you need professional investment advisory and financial modeling services?

Contact our representative to learn more about the benefits of CP Finance UK

We are absolutely sure that our experience and innovative financial technologies will help your business achieve the best project financing conditions.

CP Finance UK FINANCE LIMITED
Website:https://c-pfinanceuk.com/
E-mail:finance@cpuk-financeltd.com
Alt-Email:admin@cpukfinanceltd.com

Many enterprises that have experience in implementing and financing of investment projects in Australia have found themselves in situations where potential investors refused to provide funds, motivating their decision with a too high investment risk in certain sectors.

Some of the risks involved in financing of investment projects in Australia are summarized below:

• Volatility in government policy, especially in terms of supporting capital-intensive infrastructure projects under the PPP. For example, a few years ago, the Australian media covered the situation around the multibillion-dollar project East West Link (Melbourne), the construction of which was stopped due to a change of government.

• Insufficiently mature stock market limits the ability to attract serious financial resources through the issue of securities. This forces companies to seek external funding and flexibly use various combined instruments to implement capital-intensive projects.

• The fragile state of the Australian energy sector, against the backdrop of low local electricity demand, remains a major obstacle to new energy projects. Given its isolated geographic location and remoteness from neighboring countries, Australia is unable to export electricity and is forced to fully focus on domestic consumption.

On the one hand, in the developing countries of Southeast Asia and Africa, with their high political, economic and social instability, it is quite easy to lose invested capital than to make money on it.

On the other hand, the Australian market is characterized by a very high level of competition, which, against the backdrop of the ongoing global crisis, creates additional risks for capital-intensive projects, especially those implemented by young companies.

This business problem can be solved in two ways:

• The project sponsor can postpone business plans until the investment climate improves and the activity of large financial players increases, using the forced pause to implement small projects that do not require external funding sources.

• Without waiting for an improvement in the attractiveness of the sector and an increase in investor activity, look for more acceptable financial models and sources of financing.

Given the high degree of development of the local market, each company must create a favorable investment microclimate through strict adherence to payment discipline, improving production management and quality of projects, developing rational measures aimed at reducing investor risks and increasing the attractiveness of projects.

In recent years, it has become obvious that this is the only way to create favorable investment conditions and increase the likelihood of attracting investment resources.

This raises a natural question: why should a sponsor manage the investor’s risks if the investor himself pays great attention to this?

First, if the participants did not conduct a detailed analysis of project risks and did not take measures to protect investments, such a project is likely to be rejected by investors.

Secondly, if the project interests potential investors, then all decisions will be aimed at ensuring their own interests, including by increasing the risks of the project initiator.

As a result, financial conditions may arise that impede the effective implementation of the investment project and even negatively affect the financial health of the sponsor in terms of reducing financial independence.

Thus, the company’s activities in organizing project financing should be based on professional assessment and investment risk management.

Currently, many companies in Australia need a flexible financing scheme that will provide an acceptable level of risk and return on investment for all participants. Based on the results of the analysis of the project and the risks associated with its implementation, and the available ways to manage them, the company outlines preliminary options for the project financing scheme. The final option can only be determined after negotiations with investors.

Each project financing scheme should include:

• Evaluation of landlords who provide borrowed funds in the form of an investment loan, and shareholders who become the actual co-owners of the project.

• Financing agreement, including the amount of borrowed funds, debt repayment period, grace period for repayment of principal and effective interest rate.

• Terms of participants’ contributions (acquisition of shares by shareholders), including the value of a share, participation limit, types of shares (common or preferred).

• Risk management options (types of collateral).

When developing schemes for financing investment projects, it is necessary to adhere to the general rule: the material security of the loan and the conditions for the participation of investors must reduce or completely eliminate the risks unacceptable for them.

For example, if a project financing scheme in Australia requires a loan from a foreign commercial bank (for example, American or Japanese bank), then it is necessary to provide adequate risk mitigation tools.

The sponsor of the project forms several possible financing schemes, which raises the problem of selecting priority instruments for further development. It is impractical to engage in the development of all schemes, because it is time-consuming and can raise doubts in investors about the seriousness of the company’s intentions.

The choice of financing schemes should be carried out according to the following criteria:

• Chance of successful implementation of the financing scheme.
• Influence of the financing scheme on the commercial efficiency of the project.
• The level of risk and reliability of financing from the investor.
• Compliance of the financing scheme with the general strategy of the recipient enterprise.

Any effectively working scheme for financing an investment project is, in fact, a compromise between the interests of investors and the initiator of the project.

When the demand for financial resources significantly exceeds the supply, initiators should seek this compromise by analyzing the investor’s risks and developing protective packages for them, maintaining their own risks at a rational level.

One of the options for such a compromise is project finance (PF), which allows balancing the risks of the investor and the initiator.

Solar photovoltaic power plant remains the reasons for investors’ interest in renewable energy sources are growing concerns about climate change, the effects of air pollution on health, the issue of energy security and affordability, as well as fluctuations in hydrocarbon prices.

Currently, the total installed capacity of PV power stations in the world exceeds 600 GW, excluding concentrating solar systems.

It is the second largest renewable energy source after wind farms.

Since the late 2010s, this technology has been a leader in the pace of construction of new power plants.

These figures are twice as much as that of wind farms.

They are even higher than those of fossil fuel plants and nuclear power plants together.

In the past four years, the installed Solar photovoltaic power plant capacity is planned to be increased by 140 GW.

According to experts from the International Renewable Energy Agency (IRENA), the development of solar energy is driven by cost savings, technological advances and the creation of the necessary associations to support the sector.

Solar photovoltaic power plant construction

According to IRENA forecasts, the number of new solar photovoltaic stations can increase 5 times over the next 10 years, reaching a total capacity of 2840 GW by 2030 and 8500 GW by 2050.

This means that the installed PV capacity in 2050 will be 18 times more than in 2018. According to European experts, in 2050, 60% of the installed capacity will come from large-scale photovoltaic installations, and the remaining 40% from in-roof PV systems.

Asia dominates the global solar energy market today, accounting for more than half of the world’s new photovoltaic capacities.

In 2019, China added over 30 GW of installed capacity, while the European Union added 16 GW and the United States 13.3 GW.

Asian countries, led by China, are currently leading in the production of photovoltaic energy.

Europe is in second place and North America in third.

Projections show that Asia will continue to lead in installed PV capacity with a share of about 65% of total capacity in 2030. The most significant growth is expected in China, where the installed PV capacity will exceed 1,400 GW in 2030.

North America will take second place with 430 GW by 2030, with 90% of the facilities being built in the United States. Europe will occupy third place with an installed capacity of about 300 GW.

In 2050, Asia will still dominate with almost half of the installed photovoltaic power in the world. According to the estimates, this figure will be 4,800 GW, of which 2,800 GW will be concentrated in China. By then, Chinese solar power will show CAGR of about 9%.

Europe will retain third place with a total installed Solar photovoltaic power plant capacity of 890 GW in 2050. About 22% of European PV installations will be concentrated in Germany.

At the same time, market growth is likely to shift to other, less saturated markets. In the future, the rapid development of solar energy is expected in South America and Africa.

The future growth of solar energy depends largely on a balanced energy policy and a reduction in the cost of PV technology. The ways to achieve this are to use cheaper materials for solar cells, reduce the cost of manufacturing equipment and increase its efficiency.

Construction of solar PV power plants: economic feasibility and cost

Solar energy has been controversial in past decades, but today it is clear that solar power plants will soon replace traditional energy sources.

The widespread use of the technology depends on its current cost-effectiveness. Solar energy today cannot always compete with traditional sources. But the long-term trend is that fossil fuels will rise in price, and solar cells and ancillary electrical equipment will become cheaper.

According to BloombergNEF, in 2020 the cost of renewable energy has dropped significantly around the world.

The levelized cost of energy (LCOE) for large-scale photovoltaic systems has decreased by 4% compared to the second half of 2019 – to € 46 per MWh. Meanwhile, the base LCOE for batteries fell to € 138 / MWh, having fallen in price by 2 times over the past year.

In China, the largest solar market, solar LCOE has dropped to € 35 / MWh thanks to the introduction of more efficient PV cells. This is almost 9% less than in the second half of 2019. The cost of operating new solar power plants in the country is now almost equal to the cost of operating coal-fired power plants, at around € 32 / MWh.

According to BNEF reports, the cheapest Solar photovoltaic power plant projects financed in the first six months of 2020 should reach LCOE in the range of 21-27 € / MWh.

These projects in Australia, China, Chile and the United States will compete with the remaining fossil fuel power plants.

Meanwhile, Abu Dhabi-based EWEC has unveiled the results of the latest solar energy tender in the UAE for a 2 GW solar photovoltaic project. The operator plans to supply energy at a price of only € 12.46 / Mwh.

Solar power plants have a number of advantages over coal-fired TPPs and nuclear power plants:

• The construction of a solar power plant is much faster as the photovoltaic modules are easy to install and connect.

• It is easier for engineering companies to choose the location of the solar power plant in accordance with the infrastructure and terrain features.

• The construction of solar power plants in remote areas reduces the energy losses associated with long-distance transmission.

• Unlike traditional power plants, modular solar energy production can be smoothly expanded as consumption increases.

Solar power plants do not pollute air and water, maintaining an ecological balance. For this reason, solar energy production is stimulated by government initiatives in most developed countries.

Today, there is no longer any doubt about the economic feasibility of building solar power plants.

The time will come when solar energy will completely displace coal and gas from the energy sector.

Construction of solar power plants for industrial enterprises

Industrial enterprises are among the largest consumers of electricity in the world energy market. 

The huge number of equipment and machines requiring power, as well as the accompanying office premises of industrial companies determine the need for an uninterrupted and reliable power supply.

With the awareness of the negative impact of traditional energy sources on the environment, more and more enterprises are switching to renewable energy sources. The challenge is to reduce the carbon footprint at every stage of the manufacturing process.

Many companies, especially in the automotive and electronics sectors, are choosing solar power plants as the optimal technology for generating clean energy.

Industrial facilities use large amounts of energy in a wide variety of processes, which are usually designed for maximum intensity.

The annual electricity consumption for the average US enterprise, for example, is 95.1 kWh per 0.09 m², which is at least 10 times the annual consumption of a typical household. Most of the energy consumed in factories is used in the form of heat, with the remaining about 20% in the form of electricity.

According to the latest research, this ratio is changing. In the 1980s, factories used 25-50% less electricity than they do now. Experts predict that by 2030 the share of electricity in the energy consumption of industrial enterprises will reach 30%.

The electrification of industry not only opens up many opportunities, but also poses new challenges for business. An example is companies that make full use of the electricity generated by coal-fired power plants.

These producers contribute to the problem of greenhouse gas emissions, which, in turn, leads to increased energy costs due to additional environmental taxes. Renewable energy sources minimize these problems. Several studies have shown that the use of solar energy can lead to significant savings in energy costs for manufacturers.

As with many other technologies, the efficiency of solar power plants increases as the scale of construction increases. In 2019, the cost of building a solar PV system for small consumers was US $ 3 per watt. However, this figure drops to $ 1 per watt when it comes to systems with an installed capacity of more than 1 MW.

Compared to coal, solar power is a clear winner because modern technology makes it possible to produce energy cheaper every year.

EPC contracting in solar energy

Chemical industry financing in Germany is characterized by a high technical level and a wide variety of products, which includes basic chemical products, chemical fibers, drugs, cosmetics, adhesives, fertilizers and much more. About 70% of the industry’s output consists of chemical raw materials and semi-finished products, which are further used in industry.

The chemical industry is closely linked to almost all sectors of the German economy and is an integral part of many value chains such as automotive industry, fuel industry, shipbuilding and construction. As of 2020, the chemical and pharmaceutical industry, which is the third largest industry in Germany, accounted for almost 11% of industrial sales in the country.

Chemical industry financing in Germany, including pharmaceutical enterprises accounted for more than 12% of investments in fixed capital of manufacturing sector.

One of the features of the German chemical sector is its deep penetration into foreign markets. In 2019, a significant part of the profits are received by foreign enterprises, where more than 400 thousand employees worked, producing chemicals worth 210 billion euros.

The German chemical & pharmaceutical industry accounts for almost a quarter of chemical turnover in the European Union.

It ranks third in the world after China and the USA. In Germany, chemistry is one of the most important sectors of the economy, responsible for a turnover of almost 190 billion euros and employing more than 460,000 people.

Investments in German chemical industry in 2020 amounted to about 8.5 billion euros.

Significant sources of Chemical industry financing in Germany long-term bank loans, mainly received from commercial banks.

A brief overview of financing German chemical industry 

The chemical industry in Germany is one of the most well-established in the world, and a world leader; a quarter of the chemicals made in the EU, are made in Germany. Currently the German industry, turning over 160 billion euros is the European leader, and the third-biggest in the world.

The largest companies of the chemical and pharmaceutical industry in Germany today include BASF SE, Bayer AG, Fresenius SE & Co, Boehringer Ingelheim, Henkel AG & Co, Merck KGaA, Evonik Industries AG, Covestro AG, B. Braun SE, Beiersdorf AG and others.

Global corporations listed on the Deutscher Aktienindex (DAX) dominate public perception, while in reality most of Germany’s 2,100 chemical companies are small and medium-sized businesses.

As high energy prices take an especially heavy toll on Europe’s industrial powerhouse, chemical companies consider moving production elsewhere.

Natural gas defines Germany’s energy system. We’ve done nothing for years but switch our entire energy supply from oil and coal to gas, for reasons such as climate protection,” says Jörg Rothermel, an energy expert at VCI, Germany’s main chemical industry trade group. “I don’t like to make sweeping statements, but it’s never looked as bleak as it does today.”

The construction and financing of solar power plants in Europe, the Middle East, South Asia, Latin America and Africa has been progressing rapidly.

This reflects the desire of governments and businesses to reduce dependence on fossil fuels, ensure energy security and environmental sustainability over the long term.

locating a low-cost sources of financing for photovoltaic projects is becoming an important challenge for the development of renewable energy sources.

In wholesome, financing of solar power plants projects, using various sources within the framework of individual financial models is considered more attractive for initiators of large projects compared to traditional bank loans.

The benefits of project finance include long-term cooperation, low operational risk, high stability and predictability of payment flows.

All this makes PF an ideal instrument for investment lending.

On the one hand, photovoltaic systems and solar thermal power plants require high initial investments. On the other hand, there are virtually no replacement and maintenance costs during the operational phase, which allows for more efficient debt service. Long-term power supply contracts and active government support in many countries make it easier to plan future cash flows.

CP Finance UK can help you find funds for solar projects on favorable terms.

Our team of European experts provides a full range of financial advisory services, including calculating your project parameters, modeling financial performance and finding tailor-made solutions.

Together with our partners, we have successfully implemented numerous energy, industrial and infrastructure projects in many countries around the world.

Our rich practical experience and well-established contacts with leading banks in Spain and other European countries will guarantee your success.

financing a solar power plants

Solar power plant project financing

The term “financing” covers all operational processes for the provision of financial resources necessary for the implementation of the project.

The investor’s decision to participate in financing is made taking into account the risk, expected income and liquidity of the assets of a particular project.

Investors are mainly looking to maximize return on equity in the face of liquidity and security constraints. For this reason, it makes sense to carefully analyze the risk profile and profit forecast of the future power plant before choosing specific financial instruments and combining them into an appropriate financing structure.

The profitability financing of solar power plants mainly depends on a realistic forecast of energy production and the stability of future cash flows in case of deviations from the plan.

All of the options for financing photovoltaic projects described below assume that the solar power plant as a whole is profitable. Depending on the resources, scale and structure of the project, a distinction is made between traditional financing (loan or leasing) or the attraction of external funds through structured project finance.

Bank loans: When it comes to applying for a bank loan to finance the construction of a solar power plant, a company can turn to one of the many commercial banks that finance renewable energy projects. If the project meets certain bank parameters, administrative procedures for the borrower are simplified, and financial conditions become much more favorable (lower interest rates).

The most common way of financing solar power plants and renewable energy projects remains a bank loan. This is a debt financing mechanism.

This type of financing is most suitable for small photovoltaic projects where the loan amount is relatively small and usually covers all investment costs.

The solar project will receive the planned funds only if it meets the expectations of investors.

In the case of banks or financial institutions, the term bankability is used, summarizing the numerous criteria used to assess the feasibility of financing photovoltaic projects of various types and sizes.

Leasing: This is a long-term contract under which the tenant company operates a solar power plant, paying the leasing company an amount that will cover the value of the asset plus interest.

Under the terms of the lease agreement, the lessee is usually responsible for insuring the power plant against damage, including natural disasters, theft of equipment, and the like.

Project finance: The construction of solar power plants through project finance refers to the so-called structured finance.

This model is characterized by the presence of several partners.

One of the features of project finance is that a solar power plant is transferred to a legal entity created specifically for a photovoltaic project (Special Purpose Vehicle, SPV).

Financing of solar power plants: Our core business service

Funding for any solar project involves planning, building and operating, with the construction phase requiring the highest investment over the life of the project. To make a decision on financing a solar power plant, the initiators must provide a full-fledged technical documentation, which contains rational technological processes, a clearly limited implementation period and the necessary financial and material resources.

Unlike the traditional lending business, it is difficult to verify the feasibility of building a future facility and requires careful analysis. There is no information about the previous situation with assets, including the past situation with profit and liquidity. Meanwhile, this information is key to assessing a company’s creditworthiness.

Analytical data and expert predictions about the likelihood of success of a photovoltaic project, obtained during the analysis process, are critical to the financing decision.

Despite the uncertainty, research shows that project finance is associated with less risk than classic corporate loans. Among the reasons for this, experts call careful monitoring by investors and managers, as well as a clearer structuring of financing.

In general, three important aspects of project finance can be identified, namely the orientation of cash flows, the distribution of risks between project partners, and the principles of off-balance sheet financing.

Risk allocation is carried out at the stage of contract development, according to which responsibility and risks during planning, construction and operation are assigned to certain participants.

During planning, financial partners take the highest risk. At this stage, professional experience and knowledge of the legal and financial aspects of solar power projects are critical to future success.

CP Finance UK offers a wide range of services in the field of engineering design, construction, operation and financing of solar plants projects.

Our solar power plant project finance services are not limited to financial modeling and professional advice. We are ready to find interested partners for your project in Europe and beyond, using our extensive business contacts in many countries around the world.

After defining the project profile and the number of participants, as well as their tasks and obligations, our financial experts will offer you the optimal project finance structure for a solar power plant.

Are you looking for funding sources for a future solar power plant?
Are you planning to build, modernize or expand your business?

Contact us for a free consultation at any time.

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