Investments in the Coal mining and Coal-fired Power plants

Among all types of fossil fuels, thermal coal is the most widespread and provides the most reliable supply. Coal has many uses, but there are some characteristics that make it particularly important as a mined fuel on a large scale, especially for power generation in thermal power plants. Havelet Finance Limited provide long-term investment for Coal-fired Power plants projects, in coal mining and thermal power plants

Investment in construction of coal-fired power plants, the thermal coal industry and financing the thermal power plants have played a critical role in the growth of the global economy and ensuring the energy security of entire countries for many decades.

Growth of investment in the global Coal-Fired Power Plant

It is obvious that the constantly growing demand and gas supply interruptions in Europe on the eve of the winter period will stimulate further growth of coal prices.

Although $1.4 trillion of the total investment will be spent on green energy, some fossil fuels are regaining their investment attractiveness against the background of restrictions on gas supplies to the EU. In particular, the acute gas crisis forced some industrialized countries to think about investment in coal-fired power plants, which can temporarily replace Russian natural gas, which was once supposed to serve as a reliable bridge for an ambitious green transition.

However, it must be recognized that the coal market was under pressure even before the start of the conflict. The difficult geopolitical situation only pushed the world to actively seek more affordable alternatives to natural gas. This alternative has existed for a long time in the form of closed investment in coal-fired power plants and thermal power plants, which now need additional funding to bring them back to life.

Bank loans for thermal coal industry and coal-fired Plants

Over a two-year period, about five hundred commercial banks around the world issued loans and provided underwriting services for more than $1.2 trillion to companies included in the Global Coal Exit List. This is strong support for investment in coal-fired power plants and thermal coal production, which has every reason to grow in the coming years. As a reminder, the Global Coal Exit List includes such world-famous energy giants as RWE AG (Germany), Glencore PLC (Switzerland), Peabody Energy Corp (USA), Eskom Holdings SOC Ltd (South Africa), as well as a number of other companies related to thermal coal.

Financing a Coal-Fired Power Plants: choosing sources

Financial resources are the main engine of business activity, regardless of the size and type of business. The economic processes taking place in each company are determined by the available capital, the received income and expenses necessary for the successful conduct of commercial activities. Given the tough competition for capital on the global market, the problem of attracting financing for investment projects is now coming to the fore. It is an irreplaceable resource at the stage of creating an enterprise, conducting current activities and implementing long-term investment in the coal-fire power plants projects.

From the basis of the forgoing, all of the above requires the correct use of financial instruments so that the selection of sources and the formation of capital is carried out in the most rational way. This is important when choosing sources of long-term financing that will ensure the implementation of large projects in the long term.

Funding sources are classified into two groups:
• Internal sources. Resources are formed from the financial flows of the company received as a result of ongoing economic activities, as well as from the sale of assets (equipment, real estate).

• External sources. Financial resources for the implementation of projects are provided by third parties in the form of loans, subsidies or in another form (for example, an issue of shares).

The role of loans in financing for Coal- Fired Power Plants

A bank loan is a traditional source of debt capital for large projects, available to companies with sufficient assets to collateralize.

The obvious advantage of lending is the relative ease of obtaining funds, but this instrument may not be suitable for young companies implementing capital-intensive and long-term projects.

Loan agreements contain, in addition to the amount, interest rate and loan terms, the purpose of providing borrowed funds. The parties include in this kind of agreement a number of clauses with the conditions for adjusting the interest rate and other parameters, guarantees of return, the powers of the financial institution to control the use of the loan, etc. The funds obtained in this way allow companies to invest in expansion, modernization and development at any time in the investment cycle. The funds received must be returned on time.

Long-term business loans secured by real estate are popular due to their simplicity and reliability, in contrast to the pledge of movable property.

Venture capital for financing Coal-Fired Power Plant

Venture capital provides unlimited opportunities for external funding, but from a practical point of view, it is difficult to find a partner willing to take risks with your team. In this context, enterprises that have concluded agreements with large players and enjoy the confidence of the market have an advantage.

The main goal of long-term venture capital investments is to promote a new project, bring it to a mature stage and sell it to another investor. Venture capital is a promising external source of financing for innovative enterprises associated with above average risk with an appropriate level of profitability.

Havelet Finance Limited offer a wide range of financial and engineering services, including investment project management and large long-term investment loans from US$3 MILLION -2 BILLION on a 2% interest yearly with maturities up to 20 years.

Our company is ready to act as a general contractor in the implementation of projects under the EPC contract. If you are looking for a reliable partner for a future project in the energy, infrastructure, industry, mining, oil and gas sector, real estate and other areas, contact the HAVELET FINANCE

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