Important Factor: Finance
Capital intensive energy projects
Investments in the energy sector often combine capital intensity with new technologies. Customized financial solutions can prove to be a critical step in the path to commercialization to bring efficient technologies to the energy market.
Role of Finance
Finance critical to project success
Whether in renewables, conventional power or oil & gas, energy projects often require substantial amounts of money. Funds must be secured in order to move ahead with the various phases of completing such large-scale projects. From planning to purchasing and installing equipment and obtaining capital needed to train staff for the operation and maintenance of the systems installed, investors are needed to support such projects at every step of the way.
Henrik Poulsen, CEO of Dong Energy, talks financing for offshore wind power parks
Financing is a critical component. It has been instrumental for us to find the money to build offshore wind farms.
Broad variety for investment
Tailor-made Financial Solutions
Siemens offers investment solutions ranging from advisory services to debt and equity capital to help our clients in the energy and natural resource markets address tomorrow’s energy needs today. With a global network of energy finance professionals, the company provides capital and expertise that is backed by more than 160 years of Siemens’ industry innovation, financial strength and diligent risk management, bundled in Siemens Financial Services (SFS).
Adjusting to a wide variety of unpredictable demands
More than ever, organizations require financial partners that can develop strategic solutions to meet today’s evolving market needs. Siemens is positioned to adjust to a constantly shifting market environment where capital demands are unpredictable. The company supports projects across a wide variety of industries, covering the full scope of a diverse and flexible financing portfolio. When customers purchase Siemens equipment or services, they may be unaware of the diverse financing options Siemens has to offer.
Siemens Financial Services (SFS) exercises a unique flexibility to invest debt, mezzanine or equity financing and seamlessly shift from debt to equity based upon fluctuating project requirements. As the needs of customers shift, SFS continues to tailor its financial solutions to more readily meet today’s market environment. It will continue to demonstrate flexibility based on the capital needs of customers.
Debt Solutions for the Energy sector
The spectrum of Siemens debt solutions ranges from senior secured corporate loans and structured investment financing (e.g., leases and loans) to infrastructure and project financing. In addition, its portfolio includes acquisition and growth financing, typically as syndicated loans.
SFS supports private equity and corporate clients' needs and strategic goals through senior secured loans that are tailored through all business cycles. It has the strength to structure, underwrite and hold significant positions. SFS offers both floating and fixed rate options, and is capable of a broad range of transaction sizes.
SFS also tailors junior capital financing directly for clients, offering a broad suite of integrated financial solutions – including the ability to provide secured first and second lien financing, as well as mezzanine and equity capital.
Equity Investments to support energy projects
Through its equity financing, SFS enables projects that promise an appropriate return for Siemens and its co-investors in terms of the project's risk profile. Project risk profiles are determined by market risks and project specifics, such as construction and operating risks.
SFS typically reserves equity capital to focus on projects that directly utilize Siemens equipment and services, and generally takes a minority interest in a project, investing at financial close of project construction.
SFS combines an extensive track-record in equity investment to originate, structure and execute successful investments in the energy markets with an emphasis on generating superior returns together with its co-investors.
“One-stop-shop” solution from equipment to financing from single supplier
Project provides jobs and clean energy technology to community
Siemens supported customer with loan to aide in project development
Galloper Wind Farm
56 wind turbines of the six-megawatt class for the Galloper project
Siemens Financial Services to hold 25 percent of the total equity in Galloper Wind Farm Ltd.
Output of 336 megawatts to supply up to 336,000 British households
Azura-Edo IPP Power Plant
Three gas turbines for the power plant project Azura-Edo
Total installed capacity of 459 megawatts
SFS contributed USD 50 million to partially fund project’s first phase
Improvements needes all along the Energy Conversion Chain
In order to meet the challenges of a sustainable energy system measures have to be taken all along the energy conversion chain from the utilization of fossil resources through power generation and transportation to improvements in management and consumption.