Samara was engaged by a cold storage refrigeration facility in West London to help reduce its carbon footprint while improving profitability. As an early-stage business in only its third year of operation, the company faced limited capital availability for investments in renewable energy. Despite this constraint, the owners were keen to explore feasible options for reducing energy costs and achieving sustainability goals.

 

After analysing the facility’s power usage profile and real estate footprint, Samara identified a renewable energy solution that would maximise both profitability and carbon reduction. Recognising the business’s financial constraints, we proposed an innovative financing model that allowed the company to deploy a solar PV array with zero up-front cost.

 

Innovative Financing Model

 

Samara financed and retains ownership of the solar PV infrastructure, making the project viable through a profit-sharing arrangement.

 

The terms were structured as follows:

 

Tranche 1: During the initial phase, 100% of the profit generated by the installation (calculated as the energy produced compared to spot pricing) was allocated to Samara to recover the installation and deinstallation costs.

 

Tranche 2: This phase transitioned to a sliding scale profit-sharing model, starting at 100% for Samara and gradually shifting to 50/50 between Samara and the business.

 

Tranche 3: In the final stage, a perpetual 50/50 profit-sharing arrangement ensured long-term mutual benefits for both parties.

 

Results and Impact

 

This innovative arrangement had several significant outcomes:

 

• Immediate Carbon Footprint Reduction: The installation immediately contributed to the company’s sustainability goals, addressing a key concern for the business owners.

 

• Financial Benefits: By realising the future cost savings from renewable energy in the present, the company was able to recalculate the present value of its future cash flows.

 

• Improved Financing Terms: The recalculated cash flows strengthened the business’s financing covenants, enabling it to refinance at more attractive terms and unlock additional capital for growth.

 

By providing a flexible and innovative solution, Samara not only delivered a renewable energy system that aligned with the client’s sustainability goals but also enhanced the company’s financial position, demonstrating the powerful synergy between sustainability and profitability.