Venture Capital_Biogen Investment Proposal
Biogen is seeking $2,000,000 to capitalize the company and reach ‘Construction Financial Close’ to establish their first biomass fuelled generator. Having meticulously conducted due diligence, it is our recommendation that Biogen is a profitable seed company. They operate in a growing sector of the energy market with excellent prospects on the backdrop of a global shift towards renewable energy due to the threat of climate change. The expertise they bring to the table is well suited to the biomass renewable energy sector.
With the assumption that Biogen will reach ‘Construction Financial Close,’ they will require new equity funding of $12. 6 million. The plant will be commissioned in 2011, at which point the financial projections show strong earnings growth and positive cash generation. The projections show that the company is healthy and financially sound. Biogen Limited (“Biogen”) is an innovative energy infrastructure company, positioned to pioneer the next generation of clean energy developments. As a response to the growing threat of climate change, Biogen was established in February 2006, spearheaded by John E T Towner.
Biogen’s aim is to invest capital into biomass fuelled clean energy projects and they eventually aspire to have investments in projects from all renewable energy sources. Moreover,
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Biogen offers industry leading expertise in conducting due diligence, ensuring that the projects placed in their portfolio are the most viable and profitable. A key differentiation is Biogen’s ability to identify and then conduct extensive feasibility and operational & scientific studies of potential renewable energy generation facilities. Research is led by a team possessing a wealth of knowledge in the energy sector. Each project that is taken on board will be placed in the “Renewable Energy Investment Trust (REIT). ” Biogen and its funding partners shall receive an ownership share in the Trust, of which Biogen shall retain 40%.
From its role in overseeing the Trust, Biogen shall derive management fees and distributions. It will also generate fees from the designing and conducting of feasibility studies for new projects for the Trust. Income from the projects is to be generated from the sale of energy produced and the sale of renewable energy certificates. Biogen is at a pivotal stage of development, having identified the location for its first biomass fuelled power plant. Biomass-fuelled generation is advantageous as it can provide continuous energy to the electricity grid, and is a proven source of renewable energy.
Power is created as it is used in the waste cycle and thus, biomass is able to avoid greenhouse emissions in its closed cycle. Having conducted extensive feasibility studies, the Directors have decided upon the Sydney Basin as the most strategic location to construct the company’s first plant. In the future it is envisaged that Biogen’s portfolio will expand, as improving technology in the ‘green’ energy market results in improvements in the efficiency and profitability of renewable energy. It is Biogen’s ultimate goal to own a portfolio of renewable energy assets which has substantial electricity producing capacity.
Investec’s involvement and interest is a signal of the growing potential in this field. Furthermore, in November 2008, Biogen received $2. 5 million funding from the NSW Government’s Climate Change Fund Renewable Energy Development Scheme. Whilst climate change laws are pending till 2010-2011, it is inevitable that renewable energy will become a dominant part of the energy market. Indeed in the next couple of decades the majority of new electricity generating capacity installed will be renewable energy. As such Biogen is very well positioned to take advantage of the upcoming boom in the renewable energy sector.