LED it shine!
Sometimes you need to look further than the end of your nose. This certainly applies to a consultancy such as Zanders. In the past two decades we have helped companies in many diff erent sectors to find optimal financing for their company or assets. However, we also encounter situations in which the optimal financing doesn’t yet exist, or is not yet possible. And yet, the business case could be financed.
Banks regularly choose not to finance a business case, or finance it only in part, because they don’t want to run certain risks. Sometimes investors want to join in only after a minimum volume. In certain sectors it may also be that, as yet, there aren’t any existing forms of financing. At Zanders we look at the feasibility of new or alternative forms of financing and formulate business cases for these. This means putting the right parties together and formulating financial and risk models. This often happens behind the scenes or in cooperation with an investor or financier. That’s why I’d like to give you a look behind the scenes at the design of our internal project, ‘LEDs Enable’.
Zanders has been active for many years in the area of renewable energy and sustainability. We noticed that, mainly as a result of limited financeability, supply does not meet demand in the area of LED lighting.
The development of LED lighting has made huge leaps in recent years – it has improved greatly, so that it’s now even pleasant to have in the office. Many local and regional authorities see the energy-saving LED as the solution for saving both money and reducing CO2 emissions in the long-term. These are hot topics.
However, the biggest dilemma is purchasing LED lighting, as this requires a considerable investment. Furthermore, the LED world is still known partly as a ‘cowboy market’, in which buyers find it difficult to determine if they are paying the right price for the desired result.
On the other hand, at Zanders, we see high-quality suppliers who want to sell and grow. There are enough interested parties but, when it’s all said and done, a buyer can’t purchase if they can’t get the financing. In addition, suppliers themselves are often not, or to only a limited extent, able to realize pre-financing. There are now parties from whom LED lighting can be leased. However, which municipality is going to pay interest of 7 or 8% if it can borrow money itself for less than 4%?
It would of course be ideal if local and regional authorities could obtain competitive lease offers and, at the same time, be freed from installation and maintenance concerns. In order to achieve this, Zanders has developed the ‘LEDs Enable’ idea into an achievable business case. We are now involved in discussions with parties to roll this out in early 2012. The result of this idea will therefore be visible in the short term!