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Sustainable Assets Make Sense

Infrastructure Lifestyle

Land, air, and water are the most critical and vital elements for sustainability of life on this planet. With humankind’s existence, progress and development; effective utilization, management, processing, treatment, storage and conservation of natural resources is essential for sustainable economic development and growth.

Whether it is developed or emerging countries, the time has come for various stakeholders such as policymakers, industry and consumers to address the challenges facing the macroeconomics, microeconomics and development of clean technologies and projects. Under current and forecast global economic conditions, it becomes very important to focus on; fiscal, financial, market and business fundamentals with equal emphasis on sustainability.

There is so much discussion today on sustainability, natural resources and related areas. Beyond rhetoric from various stakeholders worldwide, sustainability must be based on sound balance and equilibrium of three key fundamental factors or the “3 P’s” or “People – Planet - Profits” with “Energy & Industry”, “Environment” and “Social Responsibility”.

At the foundation of the “3 P’s” is a fair, balanced and equitable baseline which is deeply rooted in; “Don’t Waste Energy, Water and Resources”. This really translates into reducing wastage. Thus, practical and realistic efforts must be directed to minimizing wastage of natural resources while achieving an optimal mix with comprehensive and integrated policy covering “all of the above” clean technologies and projects (conventional / alternate / renewable) without disqualification of any one source. The clean technologies and projects industry is extremely complex, sensitively balanced and a highly integrated sector along its entire value chain and life cycle from raw materials to exploration, production, transmission, and distribution to wholesale and retail consumers. In this context, the business and market fundamentals of clean technologies and projects have always followed some very key fundamental and critical phases, which if altered, lead to unsustainable technologies and projects. Successful clean technologies and assets development follows three (3) critical phases: Project Development (feasibility, permits & clearances, contracts, and financing); Project Execution (engineering, procurement, construction, startup and commissioning); Project Operations (facility operations, management, and operations). Many well-minded enthusiasts such as project developers, promoters and investors as well as up-and-coming “clean & green” entrepreneurs are aiming to take advantage of the potential opportunities from clean technologies and projects. In order to achieve true sustainability of projects, it is vital to address the critical phases of clean technologies and projects in light of the current economic conditions.

The project development phase must be funded by promoters, project developers and equity investors. In other words, balance sheet strength is essential for undertaking any clean technologies and projects. Similarly, development of these assets must also follow due course as venture capital is scare. In today’s economic conditions, it is very difficult to fund clean technology and project development costs with debt in the form of either senior or subordinated debt including working capital lines of credit. Design and implementation of a viable project structure is vital to the success of any clean technologies and projects. Proven Business-Revenue model(s) and structure(s) for effective project development along with funding and financing sources must be utilized. An effective comprehensive risk analysis must be undertaken by stakeholders to assess, quantify, allocate and distribute associated risks thereby resulting in a proper mitigation plan based on a viable methodology and approach. Essential next steps must be clearly defined and undertaken by various stakeholders in order for any clean technology and project to be implemented successfully and achieve true and real sustainability in the marketplace.

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