What We Do: Our Investment Funding Process from Enquiry to Close

Investment Funding Process

Klean Capital runs a staged investment funding process with a decision point at the end of every stage. Sponsors always know what happens next, what is required of them, and what would cause the process to stop. The sequence below is the same one applied to the transactions the desk has funded since 1998.

Stage one: enquiry and screening

A short submission is enough to begin: the asset, its location, the capital sought, the revenue model and the status of consents, site control and offtake. The desk responds with a candid view of financeability. Projects that cannot be funded in their current form are told so immediately, with the specific gaps identified rather than a generic refusal.

Stage two: mandate and structuring

Once a project passes screening, a mandate letter sets out scope, fee architecture and exclusivity. Structuring then determines the right blend of private equity, senior debt, mezzanine and PPP funding, whether Private Placement Investment Grade Bonds placed with institutional investors are achievable, and whether a joint venture with a development partner would improve terms. For commercial property, this is where a sale and leaseback is modelled against the alternative of mortgage debt.

Stage three: preparation and technical review

The information memorandum, financial model and contract summaries are assembled, and the technical case is tested. Klean Industries provides feasibility studies, plant design and engineering, energy and waste audits and due diligence, so mass balances, availability assumptions, capital cost estimates and construction programmes are challenged internally before an investor ever sees them. This stage is where most of the eventual speed of a transaction is created.

Stage four: placement and negotiation

The opportunity is taken to investors known to fund that asset class rather than broadcast to the market, which protects the sponsor from the reputational damage of a widely shopped deal. Term sheets are compared on tenor, pricing, covenants, security and conditions precedent rather than on headline rate alone, because a cheap facility with tight covenants can cost a project far more than a slightly dearer one with room to breathe. The preferred structure is then negotiated through to formal credit approval.

Stage five: documentation, close and drawdown

Legal documentation, conditions precedent and completion mechanics are managed through to financial close, after which drawdowns are released against certified construction milestones. Where investors require it, Klean Capital provides director services to the project company so that reporting, covenant compliance and milestone oversight continue through construction and into operations. Klean Capital Inc. is wholly owned by Klean Industries, which is why the funding process and the engineering process stay connected from first screen to commissioning.