Structuring and Financing
Mini-hydro projects will be of power 500kW to 1500kW and will cost from £1 to £2 million. The project will comprise a weir a few meters high built across a stream, relatively high up the valley, a penstock (water pipeline) buried in the valley floor descending to a powerhouse situated as low as possible. The powerhouse will house the turbine, generator and controls and is the starting point for the grid connection lines and switchgear. All of this equipment, together with its lease, planning permission, power take-off agreement, maintenance and operating contract and management agreement will make a completed project.
Project Company
Each individual project will be owned by its own project company. This will be majority owned by RR and partly by the landowner. The project company finance will be arranged by RR.
The landowner will grant a long and renewable lease on his land and water flow to the project company, which will pay him, or her, a percentage of the electrical revenues. In addition the landowner will receive dividends from the project company.
If the landowner wishes to invest in his own project then there is a mechanism for him to do that and thus to increase his proportion of the revenues of the project.
Special Purpose Vehicles
Investors will be invited in a group to put their money into a special purpose vehicle which will finance several of the project companies. This will give them a spread of risk in their investment. It also gives tax and gearing advantages in certain cases.
The Special Purpose Vehicle will not be set up until there is a list of potentially attractive projects which could be allocated to it by Running River. Potentially attractive means those for which the pre-feasibility study suggests they will make attractive returns.
Mini-hydro projects will be of power 500kW to 1500kW and will cost from £1 to £2 million. The project will comprise a weir a few meters high built across a stream, relatively high up the valley, a penstock (water pipeline) buried in the valley floor descending to a powerhouse situated as low as possible. The powerhouse will house the turbine, generator and controls and is the starting point for the grid connection lines and switchgear. All of this equipment, together with its lease, planning permission, power take-off agreement, maintenance and operating contract and management agreement will make a completed project.
Project Company
Each individual project will be owned by its own project company. This will be majority owned by RR and partly by the landowner. The project company finance will be arranged by RR.
The landowner will grant a long and renewable lease on his land and water flow to the project company, which will pay him, or her, a percentage of the electrical revenues. In addition the landowner will receive dividends from the project company.
If the landowner wishes to invest in his own project then there is a mechanism for him to do that and thus to increase his proportion of the revenues of the project.
Special Purpose Vehicles
Investors will be invited in a group to put their money into a special purpose vehicle which will finance several of the project companies. This will give them a spread of risk in their investment. It also gives tax and gearing advantages in certain cases.
The Special Purpose Vehicle will not be set up until there is a list of potentially attractive projects which could be allocated to it by Running River. Potentially attractive means those for which the pre-feasibility study suggests they will make attractive returns.
