CROWDESTOR Energy Holding is a unique project and is one of its kind exclusive investment opportunities in a number of ways. Firstly, usually, investments in the energy sector are only available to large institutional, international energy companies or high net worth individual investors. CROWDESTOR, on the other hand, with the knowledge and assets of our CEO Janis Timma, offers individual private investors to participate in this promising sector with investments starting from 1000 EUR. Secondly, CROWDESTOR offers the opportunity to register physical ownership in the Holding company and to share profit equally with other investors. Moreover, several large and mid-size investors will get a seat in the supervisory board, and will have access to more operational information, will be allowed to engage in decision making, and will represent the other fellow CROWDESTOR investors. Finally, the most obvious USP but not the last is the investment in a renewable and carbon-neutral energy source which helps our climate.
What is Biomass Energy?
Biomass energy has been around for long- the cavemen would produce it by burning timber to warm up their “rooms” or heat up the food. Now, biomass given its status as renewable energy is gaining increased popularity among countries around the world.
Biomass energy is considered to be a biofuel. This means it is renewable and is a green substitute for fossil fuels like oil, coal, and is less dangerous than nuclear power. The thermal energy plant which is the first object to be included in Energy Holding is generating thermal power through burning woodchips. Woodchips are produced in the region, and the supply greatly exceeds consumption, making it also an export commodity.
It Is Sustainable
Biomass is a renewable resource and it is considered to be carbon neutral. Even though burning woodchips produces CO2 it is still considered carbon neutral since the biomass has absorbed the carbon dioxide during the life cycle, while wood was still a tree. So, the one cancels the other, making biofuels a great alternative energy source.
This is especially relevant, now in light of the new European Green Deal, which states that the EU has to become completely carbon neutral by 2050. The deal will be a ground for building a legislative framework in the Union in the upcoming years, but most probably the consumption of non-renewable energy sources will have to be reduced.
Some scientists argue that burning wood releases too much carbon dioxide and by cutting forests this hardly can be called sustainable. However, the low-value and wood-residues can be considered as carbon neutral.
Biomass is currently accounting for 60% of all renewable energy produced in the European Union according to Eurostat. This is more than wind or solar energy combined, and without it, the EU would not be able to fulfill its commitments agreed under the Paris accord.
How the Heating Plant Works
The CROWDESTOR Energy Holding will consist of several objects. Two objects contributed to the holding as a Skin In the Game by CROWDESTOR CEO Janis Timma, who will be the manager of the venture, - operational 15 MW biomass boiler house located in Ganibu Dambis 40B, and the Powerhouse Sarkandaugava which is a 52 MW biomass powerplant, tat has raised funds for development on CROWDESTOR and is located in Ganibu Dambis 21. This is the largest privately held production plant in Riga. The largest competitor and market dominator is a state-owned energy company Latvenergo, which is operating natural gas plants, and district heating company Rigas Siltums. Therefore, the Sarkandaugava and Eco-Energy Riga heating plants have a competitive advantage, since it is a green resource, not dependent on the prices of natural gas that very fluctuate due to geopolitical and many other factors.
The investment in Energy Holding has never been offered before to private investors. Thanks to crowdfunding, we are able to collect investments from many retail investors and let them benefit from this project in the energy industry, which usually is closed to small retail investors. The incredible earning possibility is unique to closed-type deals, while CROWDESTOR investors get access to it as well (the target performance/return of the holding is 48% per annum, at an exit price equal to EBITDA multiplier x8).
The aim of the holding is to pool several biomass heating plants by direct purchase. The “package” will become one of the largest thermal power producers in the Baltics. This makes holding an attractive target for purchase by large energy conglomerates and/or institutional financial investors. This is especially relevant for the German, French, Scandinavian, USA, and Japanese market players.
The research of comparable transactions (when a company acquires heating production plants connected to district heating network in capital cities) shows an EBITDA multiplier on average x8 to x11, in some cases even x17. We are using a realistic estimate of the sale to a strategic buyer, EBITDA multiplier x8. Investors not only the annual base return but also a profit-sharing opportunity. The detailed information can be found in the project description section for registered investors.
At CROWDESTOR we take pride in being able to offer investment opportunities that are not easily available to private investors. Due to the creative approach and experience in the subject industries, we know how to structure the deal so that our investors can benefit too. The energy industry is the industry, where our CEO has deep experience since he has worked in the sector for more than ten years and is a Chairman of the Board at Combined Heat and Power Plant Association of Latvia. CROWDESTOR invites our investors to take part in one of the most promising sectors there is!