Investment opportunity

  • High-yielding investment in energy sector, financing of loan facility buyout from Luminor bank.
  • 20% planned annual return.
  • Investment principal buyback is available at 5% penalty rate.

Project description

Tukums DH is a Latvian power producing company that operates a cogeneration power plant located in Tukums region since 2012. This is an effective, environmental-friendly project that uses modern equipment and renewable energy source (woodchips) for production of thermal and electric power.

The plant consists of two independent stations, each producing both thermal and electric power. Technical characteristics of the stations are specified below:

 

1st station

  • 0,725 MWe - electric power generating capacity
  • 3,2 MWt - thermal power generating capacity
  • Boiler equipment producer - AGRO Forst&Energietechnik GMBH
  • ORC (Organic Ranking Cycle) equipment producer – Turboden S.r.l.

2nd station

  • 0,98 MWe – electric power generating capacity
  • 4,5 MWt – thermal power generating capacity
  • Boiler equipment producer – Kohlbach Group
  • ORC equipment producer – Turboden S.r.l.

Tukums DH is a successful venture due to its strategically beneficial location, effective equipment, and existing long-term contracts for consumption of electric and thermal energy, including an agreement with local municipality that is concluded until 2025. At the same time, the company has price-efficient supply of raw woodchips because of big number of local woodworking companies and relatively high competition on the market.

According to effective Latvian legislation in sphere of support of “small” (<10 MW) power producing plants, Tukums DH is receiving a subsidy from the Latvian Government (and will be receiving it until 2026 despite certain speculations around this topic, which traditionally become more tense during the pre-elections period in Latvia).

Tukums DH is looking to attract a total amount of EUR 1,050,000 for the time period of 10 months. The aim is completing the buyout of existing loan facility from Luminor bank that among the other modifications is reconsidering future cooperation with energy ventures in the Baltics following changes in the ownership structure and development strategy of the bank. The buyout is available to be accomplished at very attractive conditions allowing massive savings on future payments. Completing the buyout will allow Tukums DH attracting either a new long-term loan facility from another credit institution or strategic investment from one or several investment funds, operating in the region and interested in such type of projects.

 

Market

Latvian electricity market is quite self-sustainable with local energy plants generating approximately 103% of total internal consumption (average figure for the year 2018).

The energy production is distributed among three main types of energy plants:

  • Hydroelectric power plants
  • Thermoelectric power plants
  • “Small” (<10 MW) power plants, using renewable energy sources

The demand for electricity is not projected to decrease in the nearest future.

 

Sample repayment schedule

Envestio participant’s investment - EUR 1 000.00
Payments:

  • 22.11.2019 - EUR 16.99
  • 22.12.2019 - EUR 16.44
  • 22.01.2020 - EUR 16.99
  • 22.02.2020 - EUR 16.99
  • 22.03.2020 - EUR 15.89
  • 22.04.2020 - EUR 16.99
  • 22.05.2020 - EUR 16.44
  • 22.06.2020 - EUR 16.99
  • 22.07.2020 - EUR 16.44
  • 22.08.2020 - EUR 1016.99

Total expected return: EUR 1 167.15

Invest in this project

 

Loan information

Loan IDEN018124
Project start date22.10.2019
BorrowerSIA “Tukums DH”, Reg. Nr. 40103280665, Latvia
Funding Target€ 700 000
Loan PurposeFinancing of loan facility buyout from Luminor bank
Loan Period10 months
Interest Rate20% per annum
Repayment of Loan PrincipalIn full at the end of the Loan Period
Investment principal buyback availableYes, 5% penalty rate
Payment of Interest PaymentsMonthly, on a specific date
Financing typeSecured debt
Guarantee from the Project’s ownerCommercial pledge in favor of Envestio Collateral Agent, Personal guarantees

 

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