Development and finance
SPV structure: one company per project, with its own contracts and its own debt
The special purpose vehicle (SPV) is where the project lives. It owns the plant, signs the energy contract, takes on the debt and receives the equity. Ring-fencing the project in its own company is what allows it to be financed without putting anyone else's balance sheet at stake.
What an SPV is
A company that does only one thingAn SPV is a company created for a single project. Its corporate purpose is limited to developing, building, owning and operating that plant, and it cannot take on debt or unrelated business without its lenders' consent.
That gives the lender something it needs: knowing exactly which assets, contracts and liabilities stand behind its loan, without exposure to other businesses. It gives the investor a clean stake in a specific asset.
Each GIS Power project is structured in its own SPV. The energy user signs the contract with the SPV; GIS Power develops it, builds the plant and operates it.
When it is not a fit
- If the project is small and your company will pay cash or use its own credit: an SPV adds incorporation, accounting and administration costs.
- If there is no long-term energy contract for the SPV to sign.
- If your company wants to own the plant directly from day one.
Structure
The pieces around the SPV
What a lender finds in the data roomShareholders
The developer and the equity investors, with contributions and rights set out in the shareholders' agreement.
Energy contract
PPA, energy as a service or BOOT with the offtaker: the source of revenue.
Payment trust
Receives the offtaker's payments and distributes them in a fixed order: operations and debt first, shareholders last.
Share pledge
Shareholders pledge their SPV shares to the lenders. If the loan is not repaid, the lender can take control of the project.
Assignment of rights
The SPV assigns to the lenders, as security, its collection rights and its rights under the energy, EPC, O&M and insurance contracts.
Construction and operations contracts
EPC with price, schedule and performance guarantees, and O&M with contractual availability.
The payment waterfall
How the trust applies the moneyThe offtaker's payments do not go straight to the SPV: they go to the trust, which applies them in an order agreed with the lenders. Whatever is left at the end goes to the shareholders.
The exact order, the reserves and the conditions for distributions to shareholders are set in each loan agreement.
- 01 · Taxes and trust expenses
What the law requires and the cost of running the trust itself.
- 02 · Operations and maintenance
The plant has to keep running for there to be revenue.
- 03 · Debt service
Interest and principal on the project loan.
- 04 · Reserves
Reserve accounts for debt service and major maintenance.
- 05 · Distributions
What remains goes to shareholders, if the agreed conditions are met.
Risk is ring-fenced in each project
The SPV holds the plant, the contracts and the debt; user payments flow through a trust that serves debt first.
Takeaway
The investor assesses one asset with its own contract and cash flow, not the user’s or GIS Power’s balance sheet.
The user pays for energy, not for the plant: that is why your company does not need to invest.
Typical project finance structure.
Corporate governance
Who decides in the SPVThe shareholders' agreement sets how the board is formed, which decisions need a supermajority (budget, new debt, asset sales, changes to the main contracts) and how deadlocks are resolved.
Lenders do not vote in the SPV, but the loan agreement limits what it can do without their consent and requires regular operating and financial reports.
GIS Power delivers those reports for the life of the project as operator and asset manager.
What usually requires consent
- Taking on additional debt or granting security.
- Amending or terminating the energy contract, the EPC or the O&M.
- Selling assets or changing the corporate purpose.
- Distributions to shareholders outside the waterfall.
Frequently asked questions
Who owns the SPV?
The shareholders who contribute equity: the developer and the investors. The split is defined project by project.
Is the energy user a shareholder?
Usually not: it is the counterparty to the energy contract. In some projects the user takes an equity stake, and the structure is set up that way from the start.
What happens to the SPV at the end of the contract?
It depends on the model: the contract is renewed, the plant is removed or, under a BOOT, the plant is transferred to the user. See contracting models.
Can I invest in a single SPV?
Yes. Each project lives in its own company, so the stake is defined project by project.
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