Solar for coal in Poland
Radiant Solar Ltd
33 out of Europe's 50 most polluted cities are found in Poland. Poland still has high energy prices and a government that has promised to keep the price of renewables stable, to approach the target of producing 15% renewable energy in 2020, specifically after increased pressure from EU. The public is said to have switched opinions from supporting the nation's large coal industry. Since about 5 years, many have concluded that if Poland fails to switch paths to renewables, the country risks in the long run to become dependent on imported energy from a bigger neighbour in East. That is something few are positive to.
Radiant Solar sees an opportunity of taking a large part of the solar market in Poland and has already, after less than one year, managed to secure four land sites across the country, well ahead of schedule. This has much to do with a team consisting of respected economists, entrepreneurs and former advisers to the World Bank and the Polish ministry of finance. The team also involves competence that has constructed two of the UK's largest solar sites.
The company is ahead regarding deals and cooperations and have agreements prepared with Sequoia's green investment fund, the biggest steel producer in the world - Arcelor Mittal, and one of the largest Polish utility companies - Tauron. Two of the four sites have been granted EU subsidies covering 20-30% of the site development cost per plant. The remaining part of the specific two sites financial needs are covered by institutional partner investors.
The bonds being issued cover the top part of the financial needs of the company's initial plant, where Sequoia is planned as the main financier. The bond pays 8% per annum with quarterly payments. The first payment is made after a years time. 10% per annum is paid when interest is paid in conjunction with investment repayment. The term of the investment is 3 years.
An independent trustee acts for the benefit of the investors against the company, possessing a floating charge of the company's assets, giving first legal charge of assets in a default situation. This may rank parallel to institutional investors' charges.
The company's initial idea was to develop plants to own and operate themselves. As it now seems, a more likely scenario is that the plants will be sold to institutional investors or utility companies, as interest in the plants already have started to come in. This model is also more lucrative.
Radiant Solar has the option to further on issue more bonds. The goal of the company is a 540MW capacity. With the four secured plants, they now reach around 220MW.