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Third-Party Finance (T.P.F.)

The majority of the IDAE's direct investments are made using the third-party finance (TPF) approach. Before describing the different contractual formulas it is first necessary to explain what TPF is and what its basic features are:

TPF represents an integrated technical and financial solution for energy investment projects: the IDAE takes part in the definition of the project, providing the most appropriate technical solution for each case and financing all or part of the project investment. This, for the industrialist or final recipient this formula is a more attractive alternative to conventional finance.

The IDAE makes the investment directly, so payments are not normally required by the industrialist or final recipient of the investment: it does not, therefore, constitute a loan to the industrialist by the IDAE, as the equipment is owned by the IDAE until the investment is recovered. Thus, with this mechanism, the industrialist's debt capacity is unaffected, and the resources he can devote to other company objectives are not reduced.

The IDAE recoups its investment, with a profit, from the energy savings produced or the energy generated. This means that depreciation of the investment is not an increased cost for the industrialist, as it is paid out of the energy savings produced or the energy generated as of the time the plant in which the investment is made is brought into operation. Thus, the user of the installation enjoys a reduction in energy costs right from day one.

Once the IDAE has recouped its investment the installed equipment becomes the property of the customer: as of this time the final user benefits from all the energy savings or energy generated by the plant, and will also have improved its competitive position as it will have a more technologically advanced, and more energy efficient, plant.

Versatility of TPF to adapt to the different types of projects: TPF allows for various different contractual forms, all retaining the underlying philosophy, which are suited to different types of projects.

MODES OF ACTION

While maintaining the inherent features of TPF described above (technical/financial definition of the project, purchase of equipment, recouping the investment from savings, final transfer to industrialist), different contractual forms may be used to implement it. These are ... More information

THE IDAE'S INVOLVEMENT IN INVESTMENT PROJECTS

The process followed by a typical TPF project and the IDAE's involvement in each of the phases is as follows ... More information






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Government of SpainMinistry of Energy, Tourism and Digital Agenda