PROJECT FINANCE

Project finance is a form of financing aimed at large-scale projects, where the debt generated by the financing is expected to be repaid through the future cash flow of the project itself.

Project finance is a more complex form of financing compared to other alternative financing methods, as the guarantee of payment depends exclusively on the future of the project and its success.

In the modality presented by BRH there is a sharing of risks, as all the institutions involved believe in the project and assume the shared risk. In order to be financed in this way, the company responsible for the project must present an extremely detailed and realistic project regarding future revenue expectations.

PROJECT FINANCE - OPERATION

Project definition

In order to be financed in this way, the borrowing company must present an extremely detailed and realistic project regarding future revenue expectations. This includes possible budget overruns, quantification of production, specific products, targets and a physical timetable.

Risk analysis

BRH is in charge of authorizing financing. Based on a thorough analysis of the project plans, minimizing risks and assuming the financing operation together with the financier.

Risk sharing

The number of institutions involved in the contract allows risks to be shared. This is why BRH's model involves other entities, such as the Custodian Bank, the Operational Insurer and the Financial Institution that is going to finance the project.

Collateral

In project finance, the guarantee lies in the project's future revenues, since there wouldn't be enough liquid capital to start the project otherwise. If the financed project does not yield a return, the operational insurance company will be responsible for paying off the project's financial debt.

Debt repayment

The debt generated by the financing is repaid through the project's own cash flow. During the initial phase of the project, when there are no revenues yet, a total grace period is negotiated, precisely so as not to impact on the financial development of the project

Project definition

In order to be financed in this way, the borrowing company must present an extremely detailed and realistic project regarding future revenue expectations. This includes possible budget overruns, quantification of production, specific products, targets and a physical timetable.

Risk analysis

BRH is in charge of authorizing financing. Based on a thorough analysis of the project plans, minimizing risks and assuming the financing operation together with the financier.

Risk sharing

The number of institutions involved in the contract allows risks to be shared. This is why BRH's model involves other entities, such as the Custodian Bank, the Operational Insurer and the Financial Institution that is going to finance the project.

Collateral

In project finance, the guarantee lies in the project's future revenues, since there wouldn't be enough liquid capital to start the project otherwise. If the financed project does not yield a return, the operational insurance company will be responsible for paying off the project's financial debt.

Debt repayment

The debt generated by the financing is repaid through the project's own cash flow. During the initial phase of the project, when there are no revenues yet, a total grace period is negotiated, precisely so as not to impact on the financial development of the project

FINANCIAL GUARANTEES

The financing model uses financial guarantees instead of tangible asset guarantees.

Standby Letter of Credit (SBLC)

We require the project applicant to issue a Stand by Letter of Credit for 35% of the amount financed with cash funds to back up the amount borrowed.

LAL (Liquidity Access Line)

Another and cheaper alternative would be a guarantee based on 25% to 30% of the financing blocked in the customer's own dedicated account and the generation of a direct credit line.

SUCCESSFUL CASES

With successful cases in Latin America and Brazil in recent years, BRH set up a multidisciplinary team in 2023 to meet the great demand from the Brazilian market. This allows us to work on site and accompany the client throughout the project timeline.

The professionals involved have over 30 years' experience in the financial market and are former directors of national and international institutions. BRH has also set up a subsidiary in Brazil.

We are implementing a major strategic business plan, corporate governance, processes, legal and risk structure, all based on technology, consultancy and auditing,

With this in mind, BRH intends to contemplate dozens of projects in 2024, with an estimated budget of 120 million dollars.

BRAZILIAN CLEAN ENERGY COMPANY

A client in the photovoltaic energy market approached BRH to build two plants and set up a CVM-regulated fund to attract long-term investors to generate energy.

It currently has projects with more than 200 MW of production installed in areas in the states of Bahia and Rio Grande do Norte, and with more than 500 hectares of projects and installed capacity, it will produce more than 350 MW.

Amount raised - U$20,000,000.00

IMPORTER AND RESELLER OF SOLAR POWER GENERATION KITS

One of the biggest players in the resale market for home kits for generating solar energy is located in the state of São Paulo.

It sought BRH's help to build a logistics center to increase its storage capacity and also directed part of the funds to direct financing of the kits to end customers.

This led to a significant increase of more than 150% in its monthly sales. It is currently increasing its focus on supplying kits for large projects.

Amount raised - U$14,000,000.00

SILO AND SHED CONSTRUCTION COMPANY

Located in the central region of the country, this construction company approached BRH to finance the construction of two silos and grain sheds to meet the demands of a Chinese holding company, which was looking for a place to store the grain it had bought and which needed a place to store it until it was exported.

The operation was closed with a 30-year rental contract, which was the basis for the financing operation.

Amount raised - U$18.000.000,00

PACKAGING INDUSTRY

A plastic packaging company located in the south of the country approached BRH to expand its range of packaging and operate in a new sector, frozen food.

To do this, it needed to purchase equipment, expand its factory and increase its commercial and logistical operations. It built a new warehouse, invested in new packaging machines and changed its fleet of trucks

Amount raised - U$8,000,000.00

BUILDING COMPANY

Located in the state of São Paulo, this company approached BRH to develop 2 real estate projects and to seek a financial balance in its civil construction operations.

With the resources, it built its projects, raised funds for its growth and today has an investment fund in which it seeks to attract investors to participate in the results of the construction and sale of apartments. Today she has more than 3,000 investors in her company.

Amount raised - U$15,000,000.00

BRAZILIAN CLEAN ENERGY COMPANY

A client in the photovoltaic energy market approached BRH to build two plants and set up a CVM-regulated fund to attract long-term investors to generate energy.

It currently has projects with more than 200 MW of production installed in areas in the states of Bahia and Rio Grande do Norte, and with more than 500 hectares of projects and installed capacity, it will produce more than 350 MW.

Amount raised - U$20,000,000.00

IMPORTER AND RESELLER OF SOLAR POWER GENERATION KITS

One of the biggest players in the resale market for home kits for generating solar energy is located in the state of São Paulo.

It sought BRH's help to build a logistics center to increase its storage capacity and also directed part of the funds to direct financing of the kits to end customers.

This led to a significant increase of more than 150% in its monthly sales. It is currently increasing its focus on supplying kits for large projects.

Amount raised - U$14,000,000.00

SILO AND SHED CONSTRUCTION COMPANY

Located in the central region of the country, this construction company approached BRH to finance the construction of two silos and grain sheds to meet the demands of a Chinese holding company, which was looking for a place to store the grain it had bought and which needed a place to store it until it was exported.

The operation was closed with a 30-year rental contract, which was the basis for the financing operation.

Amount raised - U$18.000.000,00

PACKAGING INDUSTRY

A plastic packaging company located in the south of the country approached BRH to expand its range of packaging and operate in a new sector, frozen food.

To do this, it needed to purchase equipment, expand its factory and increase its commercial and logistical operations. It built a new warehouse, invested in new packaging machines and changed its fleet of trucks

Amount raised - U$8,000,000.00

BUILDING COMPANY

Located in the state of São Paulo, this company approached BRH to develop 2 real estate projects and to seek a financial balance in its civil construction operations.

With the resources, it built its projects, raised funds for its growth and today has an investment fund in which it seeks to attract investors to participate in the results of the construction and sale of apartments. Today she has more than 3,000 investors in her company.

Amount raised - U$15,000,000.00

Some operational and funding partners

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