Full Title: Energy Finance 101: An Intro to Yield Cos
Author(s): Kimble McCraw
Publisher(s): Third Way
Publication Date: July 1, 2014
Full Text: Download Resource
Description (excerpt):
This is the second paper in the Energy Finance 101 series. In the first paper, which covered Project Finance, we laid out a scenario in which you, the reader, are the CEO of Big Energy Corp., and you use Project Finance to develop a new energy project by creating Little Energy Co. In this publication, we build on that scenario to illustrate the use of Yield Cos, another increasingly common financing structure in the power sector.
You have just completed the project of your dreams at Big Energy, and you’re ready to take on something new—but how can you do it? Little Energy, despite some challenges along the way, managed to build your project and is now producing energy. This is good news, but you have a lot of money tied up in Little Energy and there is a new project you’d love to invest in. Is there a way to fund the new project, “Little Energy 2,” with the profits now coming in from the original Little Energy?