Ecostrat, New Energy Risk (NER) and Yilkins have formed a strategic alliance aimed at tackling one of the biggest obstacles to biomass project finance: feedstock supply risk.
Under the alliance, Feedstock Supply Insurance will be made available to developers who license Yilkins' drying, torrefaction and carbonisation technology, subject to underwriting and project-specific evaluation.
Lenders routinely decline to fund biomass-to-energy and biomass-to-syngas projects without a guaranteed feedstock supply, preventing developers from reaching Final Investment Decision even when the underlying project economics are sound.
That gap has kept many facilities capable of converting wood and organic residues into fuels, chemicals and biocoal from ever breaking ground.
Rather than leaving developers to resolve feedstock security on their own, Yilkins will introduce its technology licensees to Ecostrat and NER's Feedstock Supply Insurance offering, aiming to help address lender concerns around feedstock availability earlier in project development and support financing discussions.
Biomass and biosyngas projects are typically financed against two questions: will the technology perform, and will the feedstock materialise.
Yilkins' technology offering already answers the first through New Energy Risk's performance coverage; integrating access to Ecostrat's feedstock insurance addresses the second, giving developers one less financing gap to bridge independently.
Jordan Solomon, President & CEO of Ecostrat, said the alliance brings together the two pieces lenders look for. "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."
Guy Penard, Vice President at Yilkins, said licensing technology is only part of what developers need to secure financing. "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."
George Schulz, CEO of New Energy Risk, said the alliance reflects how lenders actually evaluate projects. "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."
