ARMONK, N.Y., Nov. 15, 2011 /PRNewswire/ — The wind power industry needs new capital sources. This will be especially true after the end of this year when the US Treasury cash grant program ends. The program has already provided over $7.6 billion to wind farms. This grant program has been minimizing the need to work with institutional investors with the ability to use the tax benefits. By year end, capital access will again be a pressing issue. At that time, the production based tax credit and its proposed 4-year extension take center stage.
Guaranteed WindPower is one solution for this need for capital. David Freund of Jupiter Renewables has developed this complete solution for wind power investments. This solution specifically addresses the need for new tax motivated equity capital. Importantly, developers will receive a market level of profitability and investors will receive a high risk adjusted return.
Guaranteed WindPower provides a floor for investor’s returns. The floor is supported by renewable energy industry leaders with strong balance sheets and credit ratings (“A” to “AA”). This credit enhancement expands the universe of investors from the current handful to a broader market of over 100-institutional investors (similar to the affordable housing market).
Like the printing press example in Steven Johnson’s Where Good Ideas Come From this patented program is a classic combination of separate existing elements. When these elements are combined, we create a transformation. In the case of a wind farm, we are transforming an investment in a wind farm into a high investment grade asset.
The transformation occurs when the investor works with the risk manager. The risk manager creates a program to manage the wind farms’ risks. The investor enters into arms-length contracts with third parties based on the risk manager’s criteria. The risk manager is confident that if the investor follows the guidelines, risk will be reduced so that the risk manager can provide the floor guarantee without the risk manager taking substantial project risk.
The investor makes the final decision. If their choices are outside of the boundaries set by the Risk manager, then the floor contract is voided. The investors are at risk for the Risk manager’s credit, and if the Risk manager fails, they are at risk for all of the hedges and ultimately for the project itself. The investor is also responsible for having the ability to use the credit.
Contact: David Freund, 914-273-2212
SOURCE Jupiter Renewables