Financing Renewable Energy Projects

The world over, investors are always on the lookout for profitable avenues for investing which can give substantial returns within a reasonable period by taking acceptable amounts of risk. People would always need roads, bridges, transport or even housing, which is why infrastructure fundraising is one of the most popular avenues for raising capital.

Oil – A Story that will end someday

But we know that the one thing that still makes the world go round is oil. We live in a world which is unthinkable without oil. That is why so many companies are in the oil and gas sector, and we regularly see action in the oil mergers and acquisitions space. But this is a fairytale which will end sometime in the future. That end might still be several years away, but the movers and shakers of the world have already begun thinking about what can be done when that day finally arrives.

Renewable Energy – A Credible Alternative

One of the sustainable solutions for the time when we will finally run out of oil is to shift completely to renewable energy sources. There are several renewable energy sources that Mother Nature herself has provided us, like the sun, wind, tides, falling water etc. If we are able to harness these sources well, then we can completely do away for the need for oil, and therefore for oil & gas m&a as well. But then, the agencies or companies that go into renewable energy would need to have adequate funding as well. For an investor, what could be the advantages of financing renewable energy projects?

Why renewable energy finance?

The biggest benefit a company gets if it provides funding for renewable energy project is that this is the future of our world, so they needn’t worry about the sector dying away someday. We are hurtling at breakneck speed towards a world which will have no oil, so all of us will necessarily have to depend on renewable energy. Second, renewable energy is a very sustainable alternative. Unlike the huge mining operations for oil and gas, the harnessing of renewable energy sources does not play havoc with the fragile ecological balance of our world.

Finally, the chances of the investment in renewable energy going bust are negligible, so even financially, it makes good sense. Because of these reasons, several companies have been taking the help of companies like Kapok Capital to deploy financial resources into renewable energy companies.

Read Also:-

• The Need for Funding in Oil & Gas
• Financing for Oil and Gas
• How a Good Fundraising Consultant Can Help
• A Dependable Partner In Oil & Gas Financing
• The Need for Mergers and Acquisitions

Strategies in Oil & Gas M&A

Businesses which require huge investments need solid funding sources or a sustainable business model. Because revenues in such business might have ups and downs, that is why we see the tremendous demand for infrastructure fundraising and renewable energy funding sources. But many companies also look for ownership route and go in for oil and gas equity. Let us look at how the Oil and Gas M&A landscape pans out in today’s business environment.

For more than two years, mergers and acquisitions in the oil and gas sector have held center stage. Last year, about $164 billion worth of deals were signed in this sector. But just two years back, the figure was little more than a third of that. There were primarily four kinds of deals that held the attention of industry watchers.

The first was where the company involved decided to completely transform itself. The companies involved did not step back and sell off their assets after facing huge financial losses. They diversified their business and acquired productive assets and used those to repay their debts. Oil companies diversified into copper mining or drilling companies acquired other companies which were into other aspects of research and exploration.

The second strategy is of accelerated growth in the same line of business. This helped such companies to scale up their capacities quickly. Shale core business is one example which has seen a lot of activity of this kind. This kind of M&A usually takes place in the same peer group of the acquirer.

Read Also:-

• A Few Recent Oil Mergers and Acquisitions
• Advantages of Oil & Gas Mergers and Acquisitions
• Dependable Funding for Renewable Energy Project
• How Kapok Capital Can Help In Oil and Gas M&A and Fundraising Activities
• Kapok Capital Will Help In Fundraising For Oil Energy Projects

Another strategy that was followed was to bring in monetization with the help of diversification. The company keeps its position in its core strength and additionally takes advantage of new opportunities. This helps to expand the portfolio in newer areas while continuing to do what it was strong at.

Finally, another strategy followed was to increase/improve the grade by hiving off non-core or lower margin assets. This helped the company to get better returns on the core assets while divesting parts of its assets which would be more helpful to other players.

One of the major players which helped in oil and gas M&A activities was Kapok Capital. Its long experience in fundraising and M&A activities helped it raise equity as well as debt. Across the globe, Kapok has been part of several large deals which have helped in the consolidation as well as expansion plans of many players in the oil and gas space.