Project Case Study – Biomass Refinancing via EquiFlex in Indonesia
Project Context
A regional renewable energy developer had commissioned a 3 MW biomass plant in Sumatra, Indonesia, with power sold under a long-term PPA to PLN. While operational and profitable, the plant’s initial financing included high-interest local debt and developer equity that constrained growth. The client sought refinancing to free up capital for new projects.
Client Objectives
1. Refinance the existing biomass plant to reduce debt costs
2. Free up equity for reinvestment in two new projects under development
3. Attract international capital without diluting ownership
4. Maintain operational control and secure long-term financial stability
Challenge
1. Existing debt was sourced from local banks with complex early repayment clauses
2. No external credit rating, limiting investor confidence
3. Limited visibility among international funders interested in Southeast Asia biomass
4. Legal and regulatory constraints on asset-backed refinancing
EquiFlex Structuring (12 weeks):
1. Technical and financial due diligence review with local and international experts
2. Preparation of a short-form bankable info memo
3. Outreach to a shortlist of project finance boutiques and renewable energy funds
4. Coordination with legal and tax advisors to secure regulatory clearance
5. Structuring of a senior secured refinancing package backed by the asset cash flows
1. Existing loan refinanced via a €1.2M senior debt facility led by a European impact investor
2. 2 local banks bought out with penalty renegotiated via third-party counsel
3. €0.4M developer equity freed up and reinvested into solar + biomass pipeline
4. Strengthened governance and compliance processes to attract future co-investors
1. Asset-backed refinancing is possible even in “non-standard” markets like Indonesia
2. International lenders require clear cash flow visibility and robust governance
3. Local legal support is critical in navigating land rights, tax codes, and repatriation issues
4. The EquiFlex model is ideal for operational assets with a clear revenue base
|
Item |
Detail |
|---|---|
|
Sector |
Biomass / Renewable Energy / Project Finance |
|
Client Type |
Regional IPP / Developer (SEA-based) |
|
Geography |
Indonesia (Sumatra) |
|
Duration |
12-week EquiFlex Structuring |
|
Services Activated |
Due Diligence, Investor Outreach, Legal Structuring, Deal Advisory |
|
Outcome |
€1.2M refinancing closed, equity reinvested in pipeline |