A Portfolio-Wide Approach to Risk Mitigation

NewWorld seeks explicit risk mitigation by avoiding the following in project finance:

• Technology risk: proven and demonstrated track record of technology; focus on nth-of-a-kind facility
• Regulatory/subsidy risk: evaluate on a case-by-case basis; do not factor anticipated regulatory policy; use subsidies as an end, not a foundation
• Project phase risk (development or construction): rely on certain project milestones involving permitting, leasing, or other approvals and agreements to help inform and evaluate risk
• Operational risk: offtake/feedstock agreements with rated or creditworthy counterparties; long-term O&M contracts with experienced providers
• Exit risk: structure and aggregate a portfolio of projects at sufficient scale to attract lenders and a larger universe of prospective buyers; demonstrate track record of performance; leverage projects to improve economics through tax equity and debt

NewWorld takes a portfolio-wide approach as an overall risk mitigant, mixing risk/reward across projects while providing stable and attractive returns. By seeking to invest in different locales, taking some development responsibility, and addressing some level of variability in offtake pricing, a portfolio of environmental infrastructure assets should earn an attractive blended target return.