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Acquisition of wood chips for the heating season | Round 01
Abierto

Faltan: €131 834.91
Tasa de interés: 30%
Período: 10 meses
Objetivo: €175 000
Abre: 2022/06/15
Vence: 2022/07/15
Categoría: Specialized
Ubicación: Latvia
Inversiones: 197

Summary

CROWDESTOR is announcing a new investment opportunity in the energy industry - ACQUISITION OF WOOD CHIPS FOR THE HEATING SEASON.

The current investment opportunity offers CROWDESTOR investors to make a loan with a 30% annual interest rate. The funding target is 175 000 EUR for the purchase of 5000 MWh of stock of wood chips at a price of ~35 EUR/MWh.

The re-selling of wood chips is planned during high-demand months - January, February, March, and April 2023. The current market situation and price forecast indicate a high profit.

The loan is secured with a pledge on the stock of woodchips.

Find the full information in the presentation attached

Loan

Borrower: SIA  CR10
Maximum target: EUR 175 000.00 
Loan period: 10 months
Interest rate: 30% p.a.
Repayment:

Interest payments are paid in bullet payments together with the Loan principal payment at the end of the Loan term.

Security:
Pledge on woodchips
Location: Latvia

Market Situation

Energy prices continue to be of high concern across the EU. High and volatile gas prices, strongly influenced by high global demand and mounting geopolitical tensions, drive high electricity prices. With rising demand for energy and the growing concern for the depletion of conventional energy sources, the focus on generating energy from alternative and green energy sources is increasing significantly.

Wood chips are produced by using residual wood from domestic forests and guarantee cheap and energy-efficient heating. The global wood chips market is anticipated to be the most developed market during 2022 - 2027 because of the increasing utilization of renewable energy resources. In addition, the escalating demand for thermal energy generation using renewable and green feedstock materials.

The energy resource price hike that started already last fall, and received another push after Russia’s attack on Ukraine, has made many Latvian heating companies revise their tariffs, and the situation is expected to deteriorate in the fall.

 

Wood chips are the most commonly used energy source for municipal heating in Latvia, comprising 400 GWh each year. Though the prices of wood and woodchips are rising, it is still the cheapest local heating resource in Latvia.  Heating needs to follow a strong seasonal trend, which is reflected in the wood chip MWh price.

  • Historically, wood chip prices have been steady with the avg. cost of 15 - 16 EUR/MWh (2018 - 2020).
  • Since January 2022, wood chip prices have sky-rocketed to 30 EUR/MWh and show no signs of stopping.
  • It is predicted that the prices will continue to grow to even reaching 60 - 70 EUR/MWh in January, and February 2023.

Due to the concern about gas prices and their sufficiency for the next heating season, the demand for forest chips has grown significantly, and their price has doubled during the year.

 

The plan is to raise funds for wood chip acquisition for summer pricing and sell the reserves during the winter months when the demand is highest.

EU renewable energy directive

According to the European Union goal for renewable energy directive (2009/28/EC) - the EU has established an overall policy for producing and promoting energy from renewable sources in the EU countries. The EU must fulfill at least 20% of its total energy needs with renewables by 2020 to attain individual national targets. 

More information can be found on https://ec.europa.eu/energy/en/topics/renewable-energy/renewable-energy-directive 

1 marketdataforecast.com

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