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Investment in Solar Projects
At a time when large financial institutes and even banks cannot offer a reasonable security level to conservative investors, SLS Solar N.V. is proud to introduce to investors an investment secured by the State of Israel that delivers a long term high yield coupled with a contribution to a cleaner and “Greener” future.
SLS Solar N.V. offers complete PV projects in accordance with the Public Utility Authority’s adopted resolution. A complete project includes a suitable site secured for at least 20 years, rights for a meter (a condition for the feed-in tariff), all necessary permits and license and a PV facility. As further explained herein, these finalized projects are offered to investors in two alternative business models guaranteeing returns of 10% - 12% without financing and up to 25% with financing.
In order to provide each and every investor with a flexible, tailor-made investment, SLS Solar N.V. offers investors the following investment plan:
For each and every investor or group of investors, SLS Solar N.V. will establish a special purpose entity (SPE), owned by the investor or with ownership and profit rights shared by several investors pro-rata to their relative investments. The SPE will be the sole owner of one or several solar PV facilities, determined by the investment amount.
The SPE (or its subsidiaries) will sign a sales contract with the Israel Electricity Corporation and will be entitled to all the electricity sales proceeds, out of which will pay for the long-term financing, as well as for maintenance (4.2% of the annual income) and 0.3% for annual insurance. The SPE will be the sole owner of all the assets of each such project and will bear no costs other then the abovementioned. The SPE’s income can be used later on for repayment of external financing.
Based on a theoretical average annual incident solar irradiance, SLS Solar N.V.’s unique equipment and an 80% financing, the offered investment assures investors an IRR of up to 25%. This calculation reflects the project being active for 20 years in parallel to the feed-in tariff regulation. However, actual profits are expected to be even higher as such projects can continue for 25 or 30 years, which is the actual lifetime of the equipment. However, at the first stage - before external financing - the expected IRR is 10%-12%, which is also the expected return in case no external financing is ever secured.
This theoretical return is possibly exposed to two types of potential risks:
- A technological risk, as the facilities are expected to operate for 20 years or longer. SLS Solar N.V. manages this risk in two manners: the first is contracting only with first rate, financially stable suppliers that can provide long term warrantees for the equipment’s durability and output. The second is a unique long-term maintenance agreement with the tracking systems’ supplier which assures the SPE that in the event that SLS Solar N.V. Ltd. fails to perform the maintenance, the SPE can ask the supplier to perform it directly at a pre-agreed price.
- A solar irradiance risk, as the project calculations are based on a theoretical average and every change in irradiance may directly affect the project income. SLS Solar N.V. offers investors protection against such a risk by calculating the actual irradiance at the end of the first year of the project and updating the investment amount or the return on the investment in a manner that would preserve the minimal IRR based on the real results of the first year.