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INVESTOR GUIDE FOR INDIVIDUAL & RETAIL INVESTORS ONLY
...global investment in clean energy was $310bn last year...up 16% from a revised $268.1bn in 2013. Source: “Rebound in clean energy investment in 2014 beats expectations”, Bloomberg New Energy Finance (BNEF) - 09 Jan 2015
Renewable energy will draw $8 trillion in investment over the next 25 years, nearly double the amount that countries will spend on coal, natural gas and nuclear plants. Source: “Renewable Energy To Topple Fossil Fuel With $8 Trillion Investment Surge By 2040: Report”, International Business Times - 23 June, 2015
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OVERVIEW VENTURES
Providing a platform for businesses and individuals to engage and participate in renewable energy opportunities previously only accessible to institutional investors.
Fixed Returns • Outperform UK Bank of England Interest Rate* with annual returns of up to 8% for three years
Government Supported Initiatives • Significant portion of the fund is linked to the long term financial incentive programmes by the UK Government
Diversification • Opportunity to ethically invest across a range of green technologies and energy efficient projects
Flexibility to Exit • Investors are not locked in long term or for a definitive time period and have the option of an early exit
*1 - UK Bank of England (Official Bank Rate) - Reached and remains at historic low of 0.5% as of Thurs 05 Mar, 2009. |3|
ABOUT US
SESCO Ventures1 is the newly established marketing and promotional arm to SESCO2, an independent Project Management firm. Our formation helps streamline SESCO’s operations and we specialise solely in marketing and facilitation for fundraising within their current project financing infrastructure. We market and promote opportunities which investors can potentially capitalise on through SESCO’s portfolio of qualified projects - these backed by UK Government financial incentive schemes and shared energy saving models.
History & Background SESCO is an independent Green Energy Project Management Consultancy Company working for the benefit of its clients e.g. other businesses and end users in the public and private sector. SESCO offers a holistic solution which is tailored to its clients which includes multiple energy efficiency and renewable technologies such as LED lighting, Solar PV and Biomass Heating. SESCO enables its clients to benefit from long-term savings through generating
green electricity, or saving energy from reducing heating and lighting costs with without any capital expenditure incurred by the clients.
savings across different project and technology types; whilst in turn contributing to both driving down energy consumption and reducing carbon emissions.
From end-to-end, client projects are managed and implemented in respect of design, installation, funding & equipment maintenance removing any difficulties for the client.
By using its financial modelling techniques, SESCO has secured key relationships with well-known funding partners and institutional investors, and has successfully raised millions in project finance from public limited companies, global investment banks, fund or asset managers & financial services firms.
To date, SESCO has successfully managed their clients’ projects by offering holistic solutions for maximising energy efficiency
1 SESCO Ventures refers to "Sesco Ventures Limited", a company incorporated in the UK. 2 SESCO is otherwise known as "Sesco Limited", a company registered in the UK.
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VENTURES
About Sesco
Our Offer
Our Expertise
Our Partners
A green project management provider who acts as a hub for clients.
Fully funded renewable solution to reduce energy costs & carbon emissions.
Public sector, commercial premises, and homeowners.
Best of breed installers who deliver bespoke solutions & offer peace of mind.
Key Deliverables:
Key Strengths:
Key Technologies:
Key differentiators:
1. Accountable
1. No upfront cost
1. LED Lighting
1. Best technicians
2. Holistic
2. No maintenance
2. Fully experienced
3. Independent
3. Fully managed
2. Biomass Heating 3. Solar PV
SAVING ENERGY
3. Meet stringent criteria of funders
SAVING COST
1. Reduce consumption from day one
1. No upfront payment (0% CAPEX)
2. Generate energy on your own site
2. No maintenance cost during the contract
3. Monitor and measure energy usages
3. Review of current energy tariff
4. Saving energy using different technologies
4. Compliance penalty avoidance
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SESCO has developed a highly diversified portfolio of vetted partners that deliver present-day technical expertise, high performance products and nationally accredited installation capacity within each renewable technology.
LED Solutions
Biomass & Solar
Past Projects & Current SESCO Clients The Chatsworth House Trust
Hall Cross Academy, Doncaster
Bede’s School, Sussex
Experience
Past Projects
These partners have a combined trading experience of over 200 years giving the assurance of well established businesses.
Projects themselves contain different variables such as location, scale of project in respect to technological installation, technology types utilised (i.e. biomass, solar, LED lighting) and the UK Government incentives offered.
The role of these partners ist extremely critical as they provide the best technology to last the life of and beyond the agreement, and ensure reliable performance by maintaining the equipment.
Riverside Housing
The range of clients with projects requiring investment and funding have included schools, hospitals and retail establishments across both the public and private sectors.
Investors have peace of mind in these partners when providing capital for projects as they have met stringent qualification processes.
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VENTURES
SESCO’s long-standing strategic alliances with corporates, who are experts in their own fields, have brought a combined experience of over 100 years and continued success with client projects. This has enabled SESCO to offer a highly diversified portfolio of renewable energy products (such as LED, Solar PV, Biomass) and projects to which it utilises its project management expertise.
LED
Luceco - Over 80 years of combined industry experience - A business valued at £90 million - Global presence across all major continents
WT Parker - A national leader in mechanical and electrical engineering (founded in 1922) - A Top 50 business with over 90 years’ experience - Client portfolio which includes blue chip companies and Government agencies
SOLAR Think Sustainable - Large scale commercial solar PV installations - Affiliates of Good Energy, the UK’s foremost provider of electricity from 100% renewable sources - Good Energy supply over 46,000 electricity customers and support over 66,000 homes
BIOMASS
CPL Renewables - 42 years of experience - Leading European solid fuel industry - Turnover 2014 of over £141 million
RN Mechanical - Highly rated and “award winning projects” - Founded in 1999 with experience and knowledge spanning over 4 generations - Turnover – Over £3 million
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RENEWABLE ENERGY TECHNOLOGIES
LED Lighting Solution LED bulbs differ from traditional incandescent bulbs in the way they produce the light. While old fashioned incandescent light bulbs passed electricity through a filament, LEDs produce light through the use of a semi-conductor that emits light energy when an electrical current is passed through it.
Advantage of LED bulbs: •
Energy-efficient, they use little energy as compared to other bulbs
•
Long-lasting, can last for up to 25-30 years
•
Economic, they use up to 90% less energy than traditional bulbs
•
Instant light, as they can be instantly bright when switched on
Solar PV Solution PV panels contain cells and each cell is made from one or two layers of a semiconducting material, usually silicon. When light shines on the cell it creates an electric field across the layers. The stronger the light the more electricity is produced. However, PV cells can still generate some electricity even on a cloudy day. Advantage of Solar PV: •
Reduced electricity bills due to generation of own energy
•
Protect against rising fuel costs
•
Reduce client’s carbon footprint and demonstrate CSR
•
Enhance the rental value of commercial property
•
Supported by Government’s scheme called Feed-in-Tariff (FIT) for 20 years
Biomass Heating Solution Wood-fuelled heating systems, also called biomass systems, burn wood pellets, chips or logs to provide warmth in a single room or to power central heating and hot water boilers. A biomass boiler could save thousands of pounds a year compared to electric heating in non-domestic properties.
Advantage of Biomass: •
Reduction in fuel costs when compared to Oil, LPG and other heating options.
•
Financial support, as the UK Government rewards participants with a financial encouragement called the Renewable Heat Incentive, which is paid quarterly for over 20 years
•
Low-carbon option, as CO2 emitted through burning wood is more sustainable compared to emissions from fossil fuels.
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VENTURES
Project Mechanics
Pre-installation energy bill
-
Post installation energy bill
=
Revenue i.e. fixed share of energy saving for SESCO
X Energy generation at the site
Energy generation at the site
Price: - Feed-in-tariff - PPA Revenue - Export power
X
Price:
=
=
-
Share of energy saving by client
Revenue
Revenue
Renewable Heat Incentives (RHI)
-
-
-
Costs: O&M Admin
Costs: O&M Fees Admin
Costs: O&M Fees Admin
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=
=
=
Capital repayment, investment income
Capital repayment, investment income
Capital repayment, investment income
UK GOVERNMENT SUPPORT
UK is a leading destination for renewables…… since 2010, renewable electricity generation has almost trebled and renewable electricity investment has more than doubled Source: “Ed Davey, the UK’s energy and climate change secretary, The Guardian”, 09 Jan, 2015
The Enhanced Capital Allowance (ECA) scheme allows businesses to reclaim 23% of the investment cost can be reclaimed in year 1.
Enhanced Capital Allowance (ECA)
The scheme encourages businesses to invest more freely in energy saving solutions that help reduce the carbon emissions that contribute to climate change. Certain types of energy efficient lighting products are eligible for full corporation tax relief for capitalised lighting equipment under the ECA scheme for energy saving technologies. Tax relief can be claimed on the purchase and installation costs of specific types of the LED lighting.
The Feed-in-Tariff scheme (FITs) is an environmental programme set up by the UK government to promote the use of small-scale renewable and low-carbon electricity generation technologies.
Feed-in-Tariff (FIT) Scheme
If a householder, community or business has an eligible installation, FITs pays them a tariff for the electricity they generate and a tariff for the electricity they export back to the grid. The tariff is guaranteed for 20 years and the export tariff rates are index-linked which means that they will increase or decrease with inflation.
UK Government has pledged a commitment of £860m in financial incentives towards this scheme, which came into effect on 28 November, 2011.
Renewable Heat Incentive (RHI)
The Renewable Heat Incentive (RHI) for the non-domestic sector is a Government environmental programme that provides financial incentives to increase the uptake of renewable heat. For the non-domestic sector, broadly speaking it provides a subsidy, payable for 20 years, to eligible, non-domestic renewable heat generators (e.g.biomass)
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INVESTMENT OPTIONS VENTURES
Investment Minimum Investment
ÂŁ5,000
Returns Investment Period
Rates of Return
0-12 Months
6.5%
12-24 Months
7.25%
24-36 Months
8%
(per annum)
Flexibility to Exit Investment Period
Cancellation Fee
Termination Notice Period
Rate of Interest Paid
< 12 months
Applies
N/a
N/a
0-12 Months
Nil
3 Months
Pro-rated
12-24 Months
Nil
3 Months
Pro-rated
24-36 Months
Nil
3 Months
Pro-rated
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INVESTMENT OPPORTUNITIES
The following projects are some examples of those requiring funding and which form the project portfolios offered through the various “Investment Routes” introduced and promoted by Sesco Ventures:
Project Name: St Andrew’s Church Technology Type: Biomass 199kW
Project Name: Bon Secour Technology Type: LED
Location: Swansea
Head Office Location: Cork, Ireland
Initial Funds Required: £123,844
Initial Funds Required: £185,000 Phase 1 - £1,600,000 Phase 2
Type: RHI Income/Payment Type: Shared Energy Saving Scheme Annual RHI Return: 13.46% (£16,669) Summary of Project: St. Andrew’s Church is located in two former terraced commercial buildings and was originally founded in 1862. It has all of the facilities of a modern, well equipped church including a separate prayer and washing facilities for men and women, a meeting room and a dedicated library. We propose to install a 199kW fixed wood pellet units, which will be housed in the basement store room along with a pellet bunker. The plant will be connected via a heat interface unit (HIU) which will be the point of connection between the new heating systems installed by others and the new biomass system.
Internal Rate of Return: 11% Annual Project Return: £54,814 Phase 1 - £381,765 Phase 2 Carbon Emission Reductions: Phase 1: 118.44 tonnes Phase 2: 998 tonnes Summary of Project: Bon Secours Hospital opened its doors in 1915. It is now one of the largest independent Catholic Hospitals in Europe with 343 beds, catering for up to 18,000 admissions and 29,000 outpatient attendances per year. Their requirement is to retrofit LED to reduce energy costs, carbon emissions and improve the environment for the patients and staff. The electricity savings from the retrofit of the lighting is shared with the hospital. The hospital benefit from reduced energy costs.
VENTURES
Project Name: Orchards Academy Technology Type: Biomass 975kW
Project Name: Euro Hotels Technology Type: Solar PV Head
Location: Swanley
Office Location: London Initial
Initial Funds Required: £474,320
Funds Required: £350,000
Type: RHI Income/Payment
Type: FIT income/Power Purchase Agreement
Annual RHI Return: 11.83% (£56,129) Summary of Project:
Annual FIT/PPA Return: 10.7% Carbon Emission Reductions: 2,513.55
Orchards Academy is a State school for boys and girls aged from 11 to 18, located in the heart of Swanley providing an incomparable service to pupils in a contemporary location.
Summary of Project:
The proposal is to install a 975kW BioPod using wood pellet prefabricated plant room to serve as a base load boiler. The plant room is to be located in land adjacent to the existing plant room on the north east side of the school.
This will generate green energy to reduce the operating costs of the hotel group by 25% and reduce carbon emissions. The solar panels will be spread across 8 properties and reduce the carbon emission by xxx tonnes.
Euro Hotels is a group of medium sized hotels, spread across greater London area and the South. The proposal is to install 320kW of Solar PV.
INVESTMENT ROUTE
Income Strategies Focus: •
Aiming to achieve solid, predictable returns which outperform current rates of interest and inflation
•
Regular income returns
•
Providing an alternative avenue with improved performance comparable to traditional and standard savings accounts, ISAs and bonds
•
Presenting opportunities which enable investors to participate in the transition to renewable energy for a sustainable future
Approach:
Investment Vehicle
Portfolio of Projects-Specialism & Technology LED
By Membership in a ‘Company Limited By Guarantee’
Solar
Biomass
Benefits: •
Up to 8% fixed per annum returns
•
1, 2 or 3 year fixed terms
•
Regular and tri-annual income/payment streams
•
Investor monies all “directly” held, received and deposited independently with FCA authorised and regulated Escrow/Custodian & Payment Service Providers
•
Investments based upon predictable and expected cash flow streams deriving from UK Government incentive schemes during the lifetime of the projects (up to 20 years)
•
Technologies offer returns based on measurable levels of energy production and known cost bases
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MARKET COMPARISONS
Market comparisons of other fixed income based products versus opportunities offered through SESCO Ventures:
Pensioner Bonds (65+)
Best Savings Accounts
Cash ISAs
Chancellor of Exchequer announcement - Budget statement, March 2014.
Best Interest % rates and offers on UK Savings Accounts:
Comparison of Cash ISAs & Top Tax-Free Rates:
Term: 3-Year
Term: 3-Year
Term: 3-Year
Type: Bond
Type: Fixed term Deposit Account
Type: Fixed rate ISA
Provider: NS&I
Provider: AXIS BANK
Provider: SKIPTON Building Society
Interest: 4.00% gross/AER*.
Interest AER: 2.45%
Interest AER: 1.8%
SOURCE: “Our new fixed rate Bonds exclusively for investors aged 65 and over” http://www.nsandi.com/65plus?ccd=NALBAA – NS&I (National Savings & Investments) Correct as of 08/01/2015
SOURCE: “Best Savings Accounts” www.simplysavingsaccounts.co.uk – Simply Savings Accounts Correct as of 08/01/2015
SOURCE: “Top 10 Cash ISAs – Compare Cash ISAs” http://www.money.co.uk/savings-accounts/ cash-isas.htm - Money.co.uk Correct as of 08/012015
*Gross is the taxable rate of interest before the deduction of UK Income Tax. AER (Annual Equivalent Rate) is a notional rate that illustrates what the annual rate of interest would be if the interest was compounded each time it was paid. Where interest is paid annually, the quoted rate and AER are the same.
SESCO projects 8.00%*
8 7 6 5 4
Pensioner Bonds (65+) 4.00%
3 Savings Accounts 2.45%
2 Cash ISAs 1.8%
Source: Bloomberg New Energy Finance, Jan 2015
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ANNUAL COMPARISON * 8.00% per annum - Estimated target returns offered through SESCO based on current project performance
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WHY SESCO VENTURES? VENTURES
In summary, we aim to deliver: RENEWABLE TECHNOLOGIES
ASSET-BACKED PROJECTS
FIXED RETURNS (Up to 8% p.a.)
UK GOVERNMENT SUPPORTED
SUSTAINABLE ENERGY
PROVIDING A PLATFORM FOR BUSINESSES AND INDIVIDUALS TO ENGAGE IN RENEWABLE ENERGY PROJECTS
We benefit from SESCO’s sector specific Project Management Expertise – “Hands-on” and ground level experience.
Benefits of SESCO track record and Project Funding - We provide a gateway for investing into solid, credible and vetted projects.
Renewable Energy Focused – Unlike generalist investment houses/firms with small designated teams, this sector is our forte.
Above and Beyond with Up-to-Date Market News - Part of service includes regular renewable energy/sector specific updates from our team.
Extensive Marketing for fundraising Expertise – Transparent, effective and comprehensive delivery of service.
A Personal and Bespoke Service - Clients will benefit from having a designated Business/ Account Executive attending to their needs.
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VENTURES
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