IEV Capital, a financial consulting and merchant banking-style firm, has announced the completion of a fund consisting of a USD1.83bn special purpose facility that is set to be used for ne
IEV Capital, a financial consulting and merchant banking-style firm, has announced the completion of a fund consisting of a USD1.83bn special purpose facility that is set to be used for new projects and acquisitions in the energy sector.
Headquartered in The Woodlands, Texas, IEV Capital is the commercial financing services group of IE Ventures. The company says it created the fund with its private equity partners to target sectors of the energy industry that are traditionally difficult to fund, energy savings, renewable or alternative energy and oil drilling.
The capital raised will target acquisitions and new developments in energy savings installations, ethanol production, biodiesel production, wind and solar energy generation, coal-to-liquid projects, offshore and onshore oil drilling projects.
The fund can offer an extremely advantageous structure to all parties involved, IEV Capital says, with favourable funding terms for clients including no corporate restrictive covenants or liquidity requirements, non-recourse to vendors, deferred repayment terms of as many as five to seven years.
As with proprietary funding structures, IEV Capital was able to structure a facility that can allow documentation between vendors and purchasers, such as operating and maintenance agreements, to allow the off-taker the ability to treat the transaction as an expense.
‘We are pleased to offer capital into various sectors of the energy industry that have been a challenge for investment banks to fund,’ says chief executive Ryan Sumstad. ‘We feel that with the industry expertise of our team along with this access to capital, we will be able to make a significant impact in the energy sector.
‘With hurricanes still a threat to the Gulf, we can be sure that offshore drilling projects will continue to come our way. We already have a backlog of projects that we plan to begin reviewing for this purpose. We’ve seen many projects in this space lose momentum because of a lack of funding. We’re going to use this opportunity to change that trend.’
Adds chief financial officer Charles I. Bunker: ‘With the current condition in the capital markets, we anticipate placing these funds quickly. We’ve been working on this project for several months. I know our clients will be thrilled with our efforts.’