Agriculture Solar™ Investors

Investment in an Energy CompanyAgriculture Solar can assist you in weighing these differences so that you make an informed decision on your solar development and understand the characteristics associated with the options.
Knowledge is power, especially in the solar power industry.While no project is a “sure thing,” successful projects are almost always the result of a project sponsor bringing these development and financing skills to bear.CONTACT US

Agriculture Solar Finance Options

Financing packages backed by Agriculture Solar™ Investors are on the rise.Agriculture Solar™ financing structure under our power purchase agreement (PPA) or energy service agreements (ESA) gives the customer a way to switch to solar at competitive rates without the upfront investments. Here are some comparisons (please contact Agriculture Solar™ for details):

Purchase (Cash) - "Direct Purchase"
Loan (Financing) - "Asset Based Loan"
Lease - "Equipment Lease"
PPA - "Power Purchase Agreement"

Given our knowledge of the financial vehicles available and the nuances inherent in each form, Agriculture Solar™ is able to quickly move from "concept to construction", offering you solar product price stability, structure and terms associated with project finance arrangements. Contact Agriculture Solar™ finance network directly at 520-369-AGRI or email.

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Agriculture Solar Investments in Renewable Energy Fund

Agriculture Solar™ works directly with potential investors as an investment management company continually launching series of investment funds which will invest in solar energy installations in throughout the world. Agriculture Solar™ has extensive experience in arranging investments and co-investing in renewable energy projects in Europe and Asia. The Agriculture Solar funds will invests in their own development opportunities and appeal to both institutions and private investors. Initial yields are estimated at a minimum of 9%; with targeted returns of 16%. Each fund will be a closed-end company incorporated in Nevada. According to Agriculture Solar™ these funding opportunities are being created to offer private investors the opportunity to obtain direct exposure to the solar PV, solar thermal, and energy strorage sector as it applies to the worldwide agriculture industry.

Agriculture Solar™ delivers to long-term investors at-scale solar power plants and storage with required market yields and recurring cash flows. Our experienced team develops and finances projects with financial structures that match appropriate risk and return requirements of long-term owners.

As owners of renewable energy generation assets, Agriculture Solar™ knows what works and where the risks can be down the road. We have a proven approach to reduce the risks of long-term energy investment asset management that includes:
• Stringent technology review at early stages to approve systems components and design
• Active analysis of proposed project energy production and performance
• Thorough assessment of long-term operations and maintenance costs
• Appropriate reserves built into each project

Agriculture Solar™ projects are built and delivered to:
• Proven, bankable, tier one technologies
• Top Tier Engineering Procurement Construction EPC providers
• Full real estate due-diligence and assignments
• Best in class Reps and Warrants
• Financeable Agriculture Solar Power Purchase Agreements PPAs
• Investment-grade Power and Environmental Attribute Off-takers

Investment Summary: Agriculture Solar™ Investors are offered the opportunity to invest in solar energy infrastructure assets that capitalize on the trend of governments, corporations and individuals worldwide to reduce the impact of energy generation on the environment by promoting and using solar power as a renewable energy source.

Agriculture Solar™ Investor Benefits are:
• Acquire high-quality solar energy photovoltaic and thermal energy investment projects where 100% of the power generated by the portfolio is purchased by leading utility companies. The Agriculture Solar™ energy investment projects are connected to grids operated by major utilities pursuant to long term Power Purchase Agreements regulated by Government legislation.
• Earn an attractive pre-tax IRR of 9-16% with regular cash distributions commencing at 10% and rising annually.
• Receive growth in distribution payments from the highly predictable cash flow that is based on tariffs regulated by the relevant Government and in some countries linked to inflation for up to 25 years.
• Acquire renewable energy generation assets by directly financing Agriculture Solar™ photovoltaic, thermal and energy storage development.
• No exposure to any debt refinancing risk or higher debt interest rates during the term of the debt up to 20 years.
• Project finance is arranged with no recourse to the Agriculture Solar™ investor.
• The interest rate and inflation can be hedged for up to 25 years, producing a stable long term net cash flow.
• The potential to earn from substantial capital growth in a short period.
• The investments are made through an SPV domiciled in the investor's preferred location. The SPV can be managed by the investor or Agriculture Solar™.

Investment Parameters: the completed Agriculture Solar™ energy investment projects to be acquired will range in size from 400kW to 30MW. The purchase price of Agriculture Solar™ energy investment projects varies according to a number of factors relating to feed in tariff and energy production which is determined by irradiation hours for that particular location, the type and quality of the solar panels and inverters, along with other main factors such as tracking use.

Leverage with Agriculture Solar™ energy investment project finance is typically in the order of 80% of total acquisition costs. The equity investment required is therefore in the order of 20% of total acquisition costs. The total cost of aggregating a portfolio of Agriculture Solar™ energy investment projects will range as determined by energy production which is dependent on the following factors:
• Location and amount of annual irradiation.
• Type of installation - a sun tracking system will attract greater irradiation than a fixed system.
• Type and quality of the panels and inverters.
• Engineering design.
• Proximity to the grid.

The acquisition of a portfolio would be staged over 2 years and the equity investment would be staged accordingly. Agriculture Solar™ energy investment projects can be acquired with lower or no leverage as required by the investor.

Forecast IRRs
The Agriculture Solar™ energy investment projects will generate a pre-tax IRR of 10 to 11% assuming a zero terminal value after 20 to 25 years and no leverage. The pre-tax equity IRRs are 15% to 20% after leverage over 25 years with zero terminal value. The equity IRR will increase to over 60% assuming a 2 to 3 year exit providing the investor with a 3x payback.

Exit Strategies
As the Agriculture Solar™ energy investment projects are strongly cash flow positive, with long-term guaranteed income from a major utility company, there is flexibility regarding the type of exit strategy:
• Trade Sale: An equity IRR of 60% will be achieved assuming the assets are sold in year 3. This IRR is based upon the assets being sold for an IRR of 8%. This forecast assumes a pension fund (or similar) acquires the assets for their long term annuity-style requirements. Pension funds currently require a return similar to that of an A rated corporate bond, which is currently yielding 6%. As such there is an additional 2% risk premium. A number of pension funds have shown interest at the 8% IRR level.
• IPO: Renewable energy is becoming increasing attractive with larger institutional investors increasing their awareness of and exposure to this sector. As a result the current high returns will compress to become more closely correlated to mainstream infrastructure asset classes that have similar cashflow characteristics where returns and yields are currently much lower.

Investor Returns Assured
• High investor returns with IRRs of 15% to 18% pa.
• Long-term returns for the life of the plant of 35 years.
• Tariffs are guaranteed by Government legislation.
• Revenue is paid by the electricity utility pursuant to a Power Purchase Agreement.
• Favourable electricity feed in tariffs have been legislated in regulatory regimes in countries worldwide. This is supported by mandated targets for increasing the contribution of renewable energy sources, which provide a long-term framework of support for the renewable energy industry.
• The feed in tariffs.
• The Governments have introduced similar attractive tariff regimes and/or tax incentives to attract the development and operation of Agriculture Solar™ energy investment projects.

Operating Costs
• Long-term Operations and Maintenace O&M contracts are arranged and managed by Agriculture Solar™.
• Total O&M costs are paid as a percentage of the revenue generated by the Agriculture Solar™ energy investment projects and vary between 8% and 12% pa.
• The costs cover all O&M, spare equipment, land lease payments, and insurance.
• O&M costs are fixed for the first five to ten years.
• The land lease payments are agreed for a 20 to 30 year period and a percentage of revenue or a fixed amount. Options to extend the leases beyond 25 years are common.
• Insurance costs are re-negotiated every 5 years.
• Administration costs to manage audit, accounting, tax, and regulatory reports cost up to 1% pa of revenue.

Agriculture Solar Investment Strategy

Phase 1 - Completed and operating in Region AThe total purchase price of the initial Agriculture Solar™ energy investment projects could be $190M representing total capacity of 45MW in 5 different plants. The equity componet of the Purchase Price is $38M assuming 80% leverage plus costs.

Phase 2 - Growth in Region BThe second portfolio of Agriculture Solar™ energy investment projects can be secured which are a combination of completed and operating projects as well as fully permitted and approved ready for construction. The Purchase Price is $127M for 30MW making total assets of $318M. LOIs have been signed or are in the final stages of signing. There are further projects in Countries B, C, D, and E, which have been sourced and are in the process of negotiating.

Phase 3 - Growth in Region CAgriculture Solar™ energy investment projects can be acquired in Countries F, G, H, I, J, and K, which will bring total assets to $572M in 12 months.

Phase 4 - Growth in Region DInvestments in further Agriculture Solar™ energy investment projects in the Regions A, B, C, and D, will bring total assets to $1270M in two years.

Our Role at Agriculture Solar™

  • • Manage risk management strategies including hedging debt margins, foreign currency exposures and inflation indexing.
  • • The Manager will arrange all acquisitions of newly completed Agriculture Solar™ energy investment projects with long term Power Purchase Agreements at legislated feed in tariffs with major Electricity Utilities.
  • • Current debt financing options assume an 80% LVR with current market rates and terms. In accordance with the draft term sheet provided by an international bank it is anticipated the debt will be fixed for a minimum of 20 years. The loan interest base rate and the margin will be fixed for the full term of the loan at 250 basis points over Euribor. The inflation-linked tariff increases can also be fixed for 25 years.
  • • Arrange and manage all due-diligence.
  • • Arrange transaction structuring.
  • • Arrange the necessary project financing for the development and construction of each project and a separate VAT loan facility.
• All investment decisions reside with the investor.
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