Energy Project Financing
- Author Bob Dougherty
- Published April 4, 2010
- Word count 591
Even with the energy sector being the Golden Child of Wall Street, energy project financing has been elusive. There are presently over a trillion dollars in energy project financing requests laying dormant all throughout the United States. It’s estimated though, that the number of energy projects needing funding presently in the U.S. alone borders on the quadrillion mark. So why does energy project financing get such little attention? Simply stated, it is because funding each energy project means a lot of risky zeros for the funder.
Think about it. If you funded commercial loans and you had a choice between a $2 million loan on a mall with lots of equity, or a $500 million energy project that has habitually exhausted its equity for years, which loan would you make in a questionable market? Exactly; the energy project financing request will be treated as a redheaded step child—unless you deal with financial experts who specialize in the energy project funding arena. The energy sector has long behaved as if it would never run out of credit, funds, or customers. As such, in today’s pinch market, energy project financing has taken a back seat to "safe bets."
The difference between a big banker at "Big Banks Are Us" and an energy project specialist is the specialist isn’t concerned about the risk of approving an energy project funding. A knowledgeable project financing specialist mitigates such risks with their expertise. The specialist knows specifically where to look in an energy project for gaffs, gaps, and misappropriation of funding requests. They know in fact, MORE energy projects must progress in order to keep up with the market demands. They know a winning proposal when they see one, and they also know when a project is being underfunded. Even a highly trained bank executive simply cannot be a specialist in all aspects of their funding requests. While the word billion has begun to lose its shock value in the world of energy project financing, it’s critical to conduct your business with a specialist who hasn’t lost their edge in the energy project sector.
Because of expansions of natural gas, nuclear power, shale, solar power, electricity, crude oil, steam-power, and coal, the need for energy project financing has grown into one of the most demanded, yet underfunded industries worldwide. In many parts of the world, medical research receives three times as much funding as energy financing request even though the world of modern medicine is largely at the mercy of energy.
Our modern society consumes massive amounts of fuel and energy. Even third world countries would be debilitated without the sporadic energy resources they access at present. Developed countries around the world have essentially built their infrastructures around the use of energy. And how could they possibly avoid it? Unfortunately, going to traditional sources for energy project funding has proven to be a daunting task. Even though the Obama administration and a Democrat-controlled Congress have passed stimulus bills with massive amounts of funding for new, alternative energy sources, very little of this money is being thrown at the development and continuation of existing energy resources which we are already dependent upon. The answer to this dilemma is alternative energy project financing options which take into consideration future profits of a tangible energy asset which produces income rather than a debt. Sounds enticing, right? A true energy project financing specialist will know exactly how to accomplish this task. So do yourself a favor. Engage an energy project funding specialist for your successful financing.
Bob Dougherty, CFS® has been an accomplished advisor in the finance industry since 1994. Bob has been an asset as an expert consultant in the field of international finance on political, military, and civic scales. To access Bob’s expertise you may contact him at
Boom Brothers Commercial Capital
Toll Free 866-701-3453
E-mail: Bob.Dougherty@CFSAssn.com
http://www.boombrothersworldwide.com/
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