Technology and Financing Team up for Major Energy Projects

Wednesday, December 17, 2014 2:00 pm EST

By:

Kirk Edelman, CEO, Project & Structured Finance Energy, Siemens Financial Services

As low energy prices in the United States continue to solidify the country’s position as an ideal investment location for companies, Siemens Financial Services is on the ground making sure these investment projects flourish.

 

Offering investment solutions ranging from advisory services to debt and equity capital, financing companies like SFS help energy and natural resource markets address tomorrow’s energy needs by building solutions today. As we see huge shifts in our energy markets and a more educated global population on the topic of powering our planet, finding the funds needed to support it all is critical.

 

Some examples of how that is getting done can be seen in a string of combined cycle power plants (CCPP), which we recently helped finance for Panda Power Funds. For a long-time client like Panda Power, we offer an advantage in that we provide access to both technological know-how and financial expertise in order to secure the necessary funding to complete these complex energy projects.

Our latest collaboration can be found in Leesburg, Virginia, not far from the nation’s capital. The Stonewall energy project represents a turnkey contract for Siemens. The 778 megawatt power plant marks the sixth project collaboration between Siemens and long-time customer Panda Power Funds, a private investor in power plants. 

 

In cooperation with Bechtel – responsible for the engineering and procurement for the balance of the plant, and the installation, construction and commissioning of the facility – SFS will play a major role in this project consortium by contributing $75 million of equity to the project’s complex financing package that utilizes senior debt, mezzanine debt and equity. The U.S. market in particular holds major opportunities for load growth, which presents a strong case for investing in the project. This fact, paired with the tested expertise on the sides of Siemens, Bechtel and Panda Power Funds, makes Stonewall an exemplary project in the power-generation market.

Specifically, Stonewall represents the broad range of solutions that Siemens can bring to such projects – from equipment to long-term service to financing. With several roles for Siemens to play, these projects are more attractive from an investment perspective, as they benefit several divisions and provide solid rationale for us to invest.

 

The announcement of the financial particulars of the Stonewall project comes on the heels of another momentous occasion in this partnership: the recent commission ceremony for a natural gas-fired combined cycle power plant in Sherman, Texas. Named one of Project Finance magazine’s “Deals of the Year” for 2012, this project’s financing package also saw Siemens team up with Bechtel to bring more clean energy to U.S. residents.

The success of past collaborations like the Sherman project led Panda Power to once again turn to Siemens for a financing partner – signaling the trust, commitment and confidence that SFS imbues in its projects.