Future Capital Partners Limited (“FCP”) is raising funds for its green investment opportunity ahead of an anticipated financial close in September, immediately after which construction of its bioethanol plant is due to begin.
Future Fuels No.1 LLP (“Future Fuels”) is now open to investors. Future Fuels has already raised £15m and is raising the remaining £25 million for the project from high net worth investors and companies. The LLP expects to generate post tax returns in excess of 30% per annum over a five to seven year period.
Not only does the project provide exceptional investment return potential, but investors will benefit from the tax relief available from the investment structure. Investors will be able to offset their initial investment against future income tax liabilities through the ability to claim capital allowances. This may amount to protection of up to 100% of their investment after five years. These benefits make the product ideal for financial advisors looking to recommend tax efficient solutions to their clients and present a more than compelling case when measured against EIS, VCT or BPRA investments – principally due to the unlimited and uncapped upside.
The Project is partnering with specialist project finance bank Natixis to structure c. £80 million of senior debt facility.
Tim Levy, CEO at Future Capital Partners said:
“Future Fuels is a unique investment product. The legally mandated growth of the renewable transport fuel market allows for highly attractive returns, while the downside protection offered by the tax structure of the investment makes this a low risk opportunity. Securing the involvement of Natixis is a key piece in the financial jigsaw. With their expertise in structuring senior debt onboard, we can now look forward to financial close and breaking ground in Quarter 4 this year.
”Future Fuels is an LLP established by FCP to build a Renewable Transport Fuel plant in Grimsby, North East England. The industrial scale plant, which will be operated by Vireol, will produce Renewable Transport Fuel (RTF), Ethanol, and two co-products - a high protein animal feed, Distillers Dried Grains and Solids (DDGS), and CO2. Agreements worth over £1.5 billion are currently being finalised for the purchase of these products. This includes a £1 billion agreement with a major global investment bank for the purchase of the first ten years production of the bioethanol. Once finalised, these agreements should ensure the plant’s long term profitability ahead of its construction.
EU and UK directives* have indicated that by 2020 13% (estimated at 23 billion litres) of all the Europe’s petrol fuel must come from renewable sources. Currently, just 2 billion litres (or 3.5%) of the Europe’s petrol fuel comes from renewable sources, meaning that the petrol based Renewable Transport Fuel sector is set to grow about eight-fold by 2020.
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* See EU Renewable Energy Directive and UK Road Transport Fuel Obligation Act 2007