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Third Party Financing of Alternate Energy Projects
Dean Witter Reynolds has been actively involved in all aspects of project financing. This paper discusses the needs and concerns of equity investors and lenders in financing energy projects. The paper reviews types of available loans, interested lenders, and general lender concerns, such as completion and operational risks. The paper also discusses identification of suitable equity investors and their interest in various energy projects. My part of this panel discussion is the subject of financing alternate energy projects. By the term 'alternate energy' most financial people mean a project which will sell at least part of its total energy output to an electric utility, taking advantage of the rules of PURPA already outlines for you by Marty Klepper. In an engineering sense, of course, alternate energy can cover a much wider array of possible projects, but from the point of view of third-party financing, most of the activity is in the PURPA-related projects. I will try to cover several elements of an alternate energy financing with you today. First, I will contrast direct financing with so-called project financing. I will review some key financing elements in any project financing, and finally I will discuss how an investment banker goes about arranging a financing for an alternate energy project.
Jones, A. C. (1983). Third Party Financing of Alternate Energy Projects. Energy Systems Laboratory (http://esl.tamu.edu); Texas A&M University (http://www.tamu.edu). Available electronically from