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Since the publication of the 2008 edition of our JuniperRatings, there have been significant upheavals in the financial markets that have affected the ease with which equity investment and project finance can be obtained. In particular the risk appetite of financial institutions has decreased markedly. In this changed climate JuniperRatings can play an even more important role in guiding project developers, municipalities and investors towards appropriate technologies and commercial partners. All 700+ ratings have been reviewed and revised to reflect the new funding environment and each company's progress over the last 12 months.
You can’t afford to miss out on the completely updated JuniperRatings.
There are over 104 new entries and over 120 changed ratings, as follows:
Anaerobic Digestion: 24 new entries, 16 changed ratings
MBT/MHT: 8 new entries, 23 changed ratings
Composting: 8 new entries, 7 changed ratings
Gasification: 17 new entries, 37 changed ratings
Small to Medium Scale EfW: 23 new entries, 22 changed ratings
Large Scale EfW: 16 new entries, 6 changed ratings
Plasma: 8 new entries, 9 changed ratings
Implication of the funding environment
Many funding institutions withdrew from supporting projects in this sector but those that remain have a demonstrable commitment to it. The appetite (particularly from certain private equity funds) for opportunities within the biomass renewables and waste management sectors remains as high as before the global shakedown. However their investment criteria have become more demanding, as has the screening of project-specific debt provision by banks’ credit committees. This has resulted in a flight to quality.
Robust business plans that use proven technologies to derive outputs with certain demand from contracted feeds will receive support. Interest in supporting those companies and technologies with an established track record is considerable. However, the higher cost of money and more stringent funding climate will mean that the Balance Sheets of some of the weaker players will be put under considerable strain over the next twelve months not least because projects are taking longer to reach financial close, placing additional strain on cash flow. Many of the technology developers that have high rates of ‘cash burn’ will not survive. Customers (both in the public and private sectors) aware of this potential issue will seek to award contracts to stronger players, exacerbating the difficulties for newer, weaker start-ups.
To reflect this changed market climate, Juniper has made two small adjustments to the classifications for JuniperRatings, and adjusted ratings as appropriate.
In Juniper’s opinion the broad outlook remains very positive – underlying market demand for this type of technology remains as strong as ever, projects continue to be brought forward. However we are likely to see a reduction in the number of technology providers and project developers active in this sector over the next 18 months. We regard this as good for the sector as a whole; there are arguably too many players and a need for consolidation around the strongest players.
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