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:
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 governmental subsidy (and will be receiving it until 2026).
Tukums DH is looking to attract an amount of EUR 950,000 for the time period of 11 months. The primary target of this financing is factoring-type addition to working capital of the company, used for effective cash flow management and purchase of raw woodchips when the prices are at the bottom of the slope, as the market for woodchips in the Baltic region is traditionally very seasonal and lack of supply is observed at certain moments.
Besides that, Tukums DH is going to further explore the opportunity of constructing a new agricultural or industrial-type object on the land plot, adjacent to the power plant. The initial project of building a grain dryer was simulated after several price-offers from producers of respective equipment were received and negotiations with suppliers of grain conducted. Currently, a number of alternative options is being studied in order to choose the project with the highest ROI and strongest demand curve.
Latvian electricity market is quite self-sustainable with local energy plants generating approximately 102% of total internal consumption (average figure for the year 2017).
The energy production is distributed among three main types of energy plants:
The demand for electricity is not projected to decrease in the nearest future.
Envestio participant’s investment - EUR 1 000.00
Total expected return: EUR 1 148.27Invest in this project
|Project start date||11.02.2019|
|Borrower||SIA “Tukums DH”, Reg. Nr. 40103280665, Latvia|
|Funding Target||€ 950 000|
|Loan Purpose||Addition to Tukums DH working capital, necessary for purchase of raw woodchips and further development of cogeneration power plant complex|
|Loan Period||11 months|
|Interest Rate||16.2% per annum|
|Repayment of Loan Principal||In full at the end of the Loan Period|
|Investment principal buyback available||Yes, 5% penalty rate|
|Payment of Interest Payments||Monthly, on a specific date|
|Financing type||Secured debt|
|Guarantee from the Project’s owner||Commercial pledge in favor of Envestio Collateral Agent, Personal guarantees|
Investment buyback is guaranteed!
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