• For Technology Innovation and Maturity.

    Technology manufacturers also struggle when they bring a new concept to the market too early when it lacks the proven operational availability that funders require. To achieve this, they must run the plant for a sustained period and in doing so may need to borrow high levels of expensive seed or venture capital. But, entering the market too late means expending more time, raising more money than necessary, and it’s possible the opportunity for the innovation may have passed by.

    At Allied, we see many technology manufacturers struggle to balance the competing needs of profitability and bankability through from technology concept to commercial deployment and in demonstrating that all aspects of the technology are proven and has the capability of providing an evidenced and guaranteed revenue stream for a project developer.

     

    Here are some of the most common mistakes in demonstrating a technology or promoting a project that we’ve seen erode the chances of securing financing or closing a sale, where Allied can provide a targeted solution.

     

    Scaleup

    Except where the scope of supply comes “off the shelf” from third parties, a scale-up of over say, 5 times for key components of the technology will cause concern for investors that the scaled-up unit is going to work as described. Systems need many continuous operational hours to validate the units projected life and to demonstrate the reliability of the system at an increased scale.

     

    Testing under real conditions

    Testing a technology or operating a demonstration facility shielded from real working and feedstock conditions could significantly distort the performance of the technology. For example, using super-refined feedstock for a new biomass energy facility does not demonstrate the technology will work on the dirtier and less consistent biomass that is normally available commercially.

    Controlled testing is useful to validate the science behind the process, but operational availability under real working conditions with “as received” feedstock is a requirement to validate a well-engineered system.

     

    Manufacturers declare commercialisation too early

    There is a lot of pressure on technology manufacturers to get their technology commercialised and selling. In the years it can take in development from concept to commercial deployment they will have invested more than just money into the technology. At this stage, understandably, the biggest believers in the technology are also generally part of the company.

    Premature declarations that their innovation is commercially ready can lead to problems when being commissioned in a project development, which hurts both the project developer and the technology manufacturer's credibility and often threatens overall success.

     

    Third Party Verification

    In moving from demonstration to commercialisation under real conditions without a reputable third-party expert to validate the projected life of the technology is a false economy. Attempts to skip this key step and instead rely solely on their internal work to reduce consulting fees and start generating revenue can result in a higher overall cost

    Funders don't like risk - especially when technology is new or has little or no track record; they are underleveraged.

     

    Typically, within every major capital project or large asset acquisition, there are three principle risks; financing, commercial, and operational. The project sponsor takes the financing risk, and the commercial risk of there being a market for the output of the investment and is remunerated accordingly.

     

    However, what has caused issues and, in many cases, transactions to flounder, has been the issue of who should take the operational availability risk of any new project or asset acquisition.

    • Debt Providers offer less debt, because of availability risk. 
    • Sponsors are committed to investing more equity 

    Allieds Targeted due-diligence towards Debt Protection Insurance (DPI™)

    Our Project Risk Platform's due diligence provides an opportunity for a third party to ‘guarantee’ operational risk.

     

    Allied provides a two-step due diligence process that results in the provision of a Debt Protection Insurance offered by EC3 Brokers, of London.

    This flexible due-diligence process can integrate with other suitable consultants’ reports which could fast track the due-diligence process.

     

    Allieds' Debt Protection Programme: is designed for technology manufacturers to support them in reaching commercial status as soon as possible and providing a financial product through our Project Risk Platform.

     

    The benefits of the programme are; reducing the maturity timeline, reducing the need to borrow expensive money to keep the plant running under demonstration status and attracting lower cost equity investment into the company if required and providing a fast track towards commercial deployment and export.

    By reducing the usual expectations on technology maturity required by funders, which can be up to two years of continuous operations, the requirement to borrow expensive money such as Seed or Venture Capital is substantially reduced.

     

    Our Due-Diligence provides the following flexible structures:

    • For Technologies – Pre- Commercial Deployment - technology start-up, working with your engineers and EPC contractors, to reduce or remove commissioning risk.
    • For Project Developers – Post - Technology Commercial Deployment – protecting the long-term total project investment with a guarantee to protect the projects ability to repay its debt service requirement caused by unexpected maintenance risks.
    • Supports developing technologies that are seeking to enter the commercial market with little or no track record.
    • Provides a solution to project and technology developers that meets the demands placed upon them by the financial markets enabling their technology or their project to reach its potential.
    • Enables innovation and growth in the renewable energy sectors.