Energy Finance

Siemens Financial Services, Sep 2, 2018

Energy Finance Blog: how finance and tech is enabling change

Our Head of Energy Finance at Siemens Financial Services, Ian Tyrer, shares his vies on the recent market changes and developments within the energy space and how finance is an enabler to this transition in our latest blog.

Market focus We offer a range of energy finance solutions to help support businesses within the rapidly evolving energy market to improve sustainability.

Typical projects we finance

Our finance packages are suitable for a wide range of energy projects that have a minimum value of £250,000.

Some of the typical energy solution projects that Siemens Financial Services can provide financing for are:

Wind turbines
Battery storage
Building efficiency
Distributed energy
Building retrofits

Why choose SFS

Long history and market leading position in the leasing market
Makes latest technology available without use of capital funds or cash reserves
Provides ability to upgrade to new equipment on regular basis
Cost effective alternative to traditional bank funding

Investing in Total Solutions

Energy Finance enables businesses to invest in new equipment to improve operational efficiency with zero capital outlay. This means they benefit from reduced energy and operations & maintenance costs over time.

Hexagons showing sustainable development — Siemens customer quote

Debt Solutions for the Energy sector

We support private equity and corporate clients' needs and strategic goals through senior secured loans that are tailored through all business cycles. We have the strength to structure, underwrite and hold significant positions. We offer both floating and fixed rate options and are capable of a broad range of transaction sizes.

Equity Investments to support energy projects

We typically reserve equity capital to focus on projects that directly utilise Siemens equipment and services and generally take a minority interest in a project, investing at financial close of project construction. We combine 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 our co-investors.

What our customers say...

We are delighted that Siemens, as well as becoming a project partner will also, through their technical division, support key aspects of the project including turbines, turbine installation and maintenance support

Hans Bünting, CEO, RWE Innogy

Overview of our process

Step 1: Select finance options

We advise on the most appropriate form of funding and provide finance options. We then confirm pricing once the equipment has been specified by you and capital price has been confirmed.

Step 2: Arrange for terms of credit

In order to ensure customers have the cash flow required to afford the regular payments, we will typically require latest full financials from the business, alongside any relevant supporting information, such as the nature of business activity. Our finance agreements are suited to businesses that have been trading for at least 3 years and have transaction sizes starting from £250k.

Step 3: Arrange Documentation

Once a credit facility has been approved, you are then required to sign and return the documentation to us. For leases, a purchase order is then placed for the equipment and it is delivered or installed by the supplier. For loans, the funds are transferred directly to your bank account.

Step 4: Lease Contracts only: Payment to Supplier & Contract Commences

Once the equipment is installed and on receipt of the certificate of acceptance from you confirming that the equipment is in working order, we activate the lease and pay the supplier.

Benefits of finance

Access to energy efficient technology without use of capital resources
Simplified budgeting and financial transparency with fixed payments
Regular technology updates could provide efficiency savings
Expected savings in energy costs are used to offset monthly payments, potentially reducing net investment costs to zero
Often no deposit required, which may help cash flow

Hire purchase

At the start of the contract the user pays an initial deposit and then makes regular payments until the full cost of the asset has been paid.
Benefits: Small capital outlay, easy budgeting, flexible repayment structuring

Finance lease

Siemens Financial Services buys the asset for the user and rents it to them for an agreed period.
Benefits: On balance sheet, spread payments, VAT flexibility

Energy finance case studies

Galloper Wind Farm

56 wind turbines of the six-megawatt class for the Galloper project
Siemens Financial Services holds 25 percent of the total equity in Galloper Wind Farm Ltd
Output of 336 megawatts to supply up to 336,000 British households