In3’s flagship funding is from an innovative US family office partner that has financed countless projects this way. The idea is to make capital easier to access by placing emphasis on the project’s completion. Most traditional investors use collateral “liens” and institutional ones (like banks and multilaterals) require a loan guarantee. That’s not how we work. In3CAP funding uses security — either a cash deposit or financial guarantee (compare) — to lower the barrier to securing capital and keep everyone’s eyes on the prize, which is an operating asset that generates returns for the owners and other beneficial stakeholders — people, planet, profit.
To obtain the benefits of In3’s family office funding (Completion Assurance Program guarantees delivery of the full funding for new/greenfield, project expansions, refurbishment/retrofits), we ask developers to facilitate a financial guarantee used as security. Here’s a synopsis for CAP-funded project stakeholders:
Why Security is Required
- Progress payments are replaced by automatic, bank-scheduled Drawdowns against the Contract Value.
- Progress payments are fully guaranteed by the funder. The developer and contractor’s interests can be further protected by inserting an escrow service to manage apportioning of the payments, if requested.
- This method of security is used because the invested funds are deployed well ahead of any revenue. The funder’s risk peaks at approximately 80% of contract value, before reducing as deliveries are made.
- Initially, ahead of first draw, the instrument is revocable. Then the net value of the security pledge is limited to the accumulated value of funds advanced.
- The secondary role of the security is that project completion and commissioning is ensured.
Know more about Security and How It Works | Completion Assurance Guarantees