Calvin’s typical funding model is based on the provision of structured finance. In each new project we establish a dedicated special purpose company to fund assets on behalf of our customers using a blend of equity and debt. The equity is provided by Kohlberg Kravis Roberts (KKR) (our owner and sole shareholder) and debt is provided from various lenders, selected specifically for each new project, from within our extensive banking syndicate.
Under this arrangement, we purchase the selected assets and pay for their installation. Our customers do not, therefore, need to provide any upfront capital. Calvin subsequently owns the assets and they are used by our customers who pay Calvin, over the long term, for their usage. Our customers benefit from Calvin’s exclusive and flexible funding vehicle which can be structured to minimise balance sheet impact.
We deliver an exceptionally high level of dedicated investment service and run a competitive process for raising debt to ensure we get the best rates from our banking partners. Calvin’s fundraising benefits from the high level of confidence which both KKR and the banks have in our proven abilities in asset management.
We currently specialise in the investment of UK metering assets (Meter Asset Provision) but are also actively pursuing new targets and looking for diversification opportunities in new overseas smart metering markets and alternative product areas.
Energy suppliers are responsible for supplying, installing and maintaining certified gas and electricity meters in the homes and premises of their customers across the Great Britain (GB). Calvin works in partnership with them to provide funding for their metering programmes which covers the procurement and installation of the meters.
The majority of meters in the GB are currently of traditional functionality in terms of their ability to provide live, accurate energy consumption information to customers. In order to comply with EU legislation to encourage consumers to reduce energy consumption, the Government has mandated that energy suppliers exchange all such traditional meters in domestic and small business premises with smart meters by 2020 - circa 53 million electricity and gas meters across GB.
This is a large scale replacement project with an associated capital investment of circa £11bn. More than ever before energy suppliers will need the very best professional support. Calvin is very well placed to provide this support and to date has funded circa 1 million smart meters (totalling a portfolio of 7 million meters). We also have relationships with key stakeholders in the metering market and continue to leverage these relationships to deliver competitive funding and professional MAP services on behalf of our clients.
Development of the energy and water infrastructure in the UK is happening at an ever increasing pace, both at a network and consumer level. An enormous capital investment is required to support this change.
BEIS estimated that around £110bn of new investment would be required in energy infrastructure by 2020 alone.
More than ever before, companies are looking for new ways to finance assets, either for their own business use or for the benefit of their customers. Calvin’s financial strength and pedigree, enable us to develop innovative and flexible financial structures, leveraging our expertise, and funding platforms to acquire assets and pay for their installation.
This specialised financing could help businesses generate stable, sustainable cash flows whilst only requiring minimal ongoing capital expenditures.
Calvin have identified a number of market sectors, including EV charging, energy efficiency initiatives and energy storage to name but a few. We are in discussion with a large number of stakeholders about how we can support them with funding projects in these areas. We are flexible in our approach and always keen to talk with interested parties about any requirements they may have.