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The Fund (ACAP) represents an exciting opportunity for taxpayers and green oriented peoples to invest in a portfolio of tax deduction-qualifying Investee Companies generating long term and Government-related institutions and predictable returns from the operation of renewable energy-generating projects in the world.
The Fund is managed by AVIS Capital LTD and shall be promoted by AVIS Broker Dealers Syndicate and AVIS Bank Limited. The trading name is AVIS Global Energy and is a part of the AVIS Global Group, which has raised over USD/Euros Forty billion from Governments and investors to date since its inception.
The objective of the Manager is to achieve stable real returns for investors through investment in the renewable energy sector. The Manager will target companies whose business models are based on building, acquiring and operating renewable energy generation plants (Renewable Energy Projects, the AVIS Global Green Energy Industrial Parks), which rely on proven technologies of converting municipal waste such that the output of electricity is predictable and the production of real sustainable organic food production. The target companies will benefit from long-term price support mechanisms mandated by the governments. With some Renewable Energy Projects, it may also be possible to capture and distribute cool air and heat, which can be sold and or exchanged on a commercial basis for additional benefits from further government incentives. Some of the Renewable Energy Projects will benefit from gaining gate fees paid by the local cities.
The core proposition of the Investee Companies will be to identify, through rigorous technical, environmental and host location due diligence, attractive projects to acquire and to maximise profitability on their operation of those assets through efficient asset management. The Manager intends to obtain sovereign securities from the host location countries where the development will be established to cover any country/construction/political and/or currency risk and will also obtain from Marsh McLennan the pre-agreed overall insurance guarantee to cover any possible investment and operational risk.
It is anticipated that some Investee Companies may invest in the construction of Renewable Energy Projects in which case they would be expected to engage proven Engineering, Procurement and Construction Contractors as is normal in the industry. The Manager will not invest in companies which are seeking to develop projects (i.e. undertake the pre-planning and environmental consent and other work preparatory to constructing the plant.)
The advantage to investing in the renewable energy sector through the subsidiaries of AVIS Global Energy Limited and pursuing the business model of this nature is the risks on the execution of the business model by the management teams can be more easily identified and mitigated. Construction-related risks and overspending are typically mitigated through the Engineering teams of AVIS Global Tech. Furthermore, AVIS will mandate construction guarantees from all construction companies and suppliers. All qualified suppliers are required to deliver a fully operational industrial park according to an agreed time schedule and within budget. Adequate insurance and performance bonds will to be issued to Avis Global Energy through its construction department, AVIS Energy Tech, in order to be considered a qualified supplier.
Procurement and Construction contractors will be on fixed-price contracts. Engineering and Procurement and Construction contractors provide warranties for the installation of equipment. Operational risks principally relate to faults with the equipment leading to downtime when electricity is not being produced. The equipment will typically benefit from long-term manufacturer warranties. Investee Companies will be expected to source equipment from established and reputable suppliers. As is typical in the industry, Investee Companies will also engage contractors to provide operation and maintenance services and will be required contractually to maintain a specified level of operational capacity. Additional standard industry insurances will be taken out to cover risk of insurable loss, e.g. vandalism and political risk, including operation default coverage.
The stability of Investee Company revenues will be significantly assisted by long-term government price support mechanisms in addition to the market price of the electricity produced and organic food production. In most countries, this will typically occur through the issue of Renewable Obligation Certificates (ROCs) to the Investee Companies which have a significant component of value which is guaranteed, and index linked.
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