Lenders won’t fund what they can’t verify, and uncertainty around supply has quietly kept viable projects from ever reaching construction. Under the alliance, Feedstock Supply Insurance (FSI) will be made available to developers who license Yilkins’ drying, torrefaction, and carbonization technology, subject to underwriting and project-specific evaluation.
Lenders routinely decline to fund biomass-to-energy and biomass-to-syngas projects for one reason: without a guaranteed feedstock supply, developers are unable to close in on Final Investment Decision (FID). That holds true even when the underlying economics are sound, which is why so many facilities capable of converting wood and organic residues into fuels, chemicals, and biocoal never break ground.
Rather than leaving developers to address feedstock security independently, Yilkins will introduce technology licensees to Ecostrat and NER’s Feedstock Supply Insurance offering, which may help address lender concerns regarding feedstock availability. The alliance is intended to help qualified projects address feedstock supply concerns earlier in the development process and support financing discussions.
Biomass and biosyngas projects are financed against two questions: will the technology perform, and will the feedstock show up? Yilkins’ technology offering already answers the first, backed by New Energy Risk’s performance coverage. Integrating access to Ecostrat’s FSI offering helps address the feedstock component of project risk, complementing the technology-related protections available through New Energy Risk.
For developers, that means one less financing gap to bridge on their own — and for Yilkins, a technology package that’s easier for lenders to say yes to.
“Yilkins has already solved the technology risk problem for its licensees. What we’re adding is the other piece lenders always ask about: is the feedstock actually there. Putting those two answers together in one package is what makes this alliance work, and it’s what makes these projects financeable,” said Jordan Solomon, President & CEO, Ecostrat Inc.
“Licensing our technology is only half the battle for a developer; the other half is convincing a lender the project will actually get built. This alliance brings together technology performance coverage from New Energy Risk and Feedstock Supply Insurance from the Ecostrat-New Energy Risk partnership, helping developers address two of the key risks capital providers evaluate during project financing,” said Guy Penard, Vice President, Yilkins.
“Lenders don’t underwrite technology risk and feedstock risk in isolation, they underwrite the whole project. Yet historically, that’s exactly how these risks got evaluated: separately, by different parties, on different timelines. Bringing our technology performance coverage together with Ecostrat’s feedstock supply insurance offering helps create a more comprehensive framework for evaluating project risk,” said George Schulz, CEO, New Energy Risk.
All insurance products referenced herein are subject to underwriting review, policy terms and conditions, and project-specific risk assessment.
