Regen gm everyone!
Our team has been fully focused on building Gigawatt for the past 8 months. We have been completely self-funded and dedicated to our mission of supercharging the green energy transition by accelerating the development and growth of renewable energy sources.
We are excited to introduce Gigawatt to the Celo ecosystem and become active facilitators of the ReFi movement.
Decentralised Renewable Energy Protocol
We’re building Gigawatt, an asset backed debt financing protocol to super charge the clean energy transition.
We’ve proactively signed LOIs with 6 independent power producers in <5 EU markets ahead of our launch, we’ll finance at least 2 assets by EOY with attractive 7% interest rate and are targeting to originate $50M+ in loans in 2024.
Our v2 will ft diversified exposure to globally distributed renewable energy sources that have guaranteed revenue, and we’ll even start to acquire and construct new protocol owned assets to deliver market leading yield whilst building world’s first decentralized energy commons (for context, our team have already built renewables portfolio exceeding €200M).
We’re planning to build natively on Celo, & would greatly appreciate your feedback! We believe that you as the Celo ecosystem and community don’t just understand our mission towards a more regenerative financial system, you’re actively working on it… We’re co-creating it all together.
Introducing Gigawatt
Generally, investment-grade renewable energy sources have a have a guaranteed buyer (off-taker, which is usually a large corporation or state entity), that agrees to purchase all of the electricity they produce at a fixed rate for 5-25+ years in a Power Purchasing Agreement (PPA).
Despite cash flows being easily projected and assured for the long term, renewable energy sources en masse struggle to attract financing from banks, with the traditional financial sector continuing to inequitably over finance the development of fossil fuels.
This creates a novel opportunity for high yielding revenue based debt financing from private creditors that can supercharge the clean energy transition.
By enabling Creditors to originate asset backed facilities on the blockchain, that are supplied with stablecoins to finance profitable renewable energy sources with collateralised loans in the real world, the Gigawatt Protocol is able to steward a fairer & more efficient market for both sides.
Following financial, legal & technical due diligence practices a resNFT (Renewable Energy Source NFT) can be minted on the protocol as an onchain data store representing a Real World Asset that leads to the creation of a Pool.
The Pool is subsequently supplied with stablecoins by KYC’d Liquidity Providers, with the Creditor using a borrowNFT to withdraw financing from the pool and issue an asset-backed loan from a Swiss SPV to the Independent Power Producer which is underwritten by their operational infrastructure. Some creditors might also opt to incorporate a Liechtenstein FinCo to tax optimise when issuing Token Securities, based on our legal research.
The loan is regularly repaid to the creditor, with Liquidity Providers receiving an attractive interest rate from the protocol. Since the loan is underwritten by the profitable operational RES that has secured revenue and the value of the loan is much greater than the RES itself, it wouldn’t make sense for the power producer to default on the loan. However, protocol actors would take ownership & continue to operate or liquidate the RES in a black swan case.
Generally, the Independent Power Producer agrees to utilise financing received to construct new renewable energy sources, resulting in an acceleration of the underfunded clean energy transition. In this special case, however, the protocol & its credit are derisked from construction phase projects, since the financing is issued and collateralised according to the existing profitable RES that has a guaranteed buyer.
Composability
Since permissioned (KYC’d) Single Asset Pools set a particular barrier to entry, we’re focused on the potential for ecosystem wide composability. One approach could be that of Ondo Finance’s Flux implementation, developers might fork Compound v2 to enable Gigawatt LP tokens as exclusive collateral in an independent & decentralized lending market.
We’re also excited about the potential of Gigawatt native renewable energy debt as a collateral type in the Maker ecosystem, enabling a more clean & regenerative stable currency. The climate action tailwinds are strong, with one of the richest states in Europe’s largest economy opting to blacklist US Treasuries due to limited ESG compliance.
RES pipeline
As a result of our extensive background & experience in renewables, as well as a recognition of the leg work required to prove the model and establish best practices in terms of legal, financial & technical structuring and due diligence; Gigawatt core contributors will issue the first loans via the protocol. The long term vision is enabling other Creditors to follow those best practices and co-operate with governance collective to scale the ecosystem.
We’ve proactively signed LOIs with Independent Power Producers in more than 5 EU markets to receive financing via the protocol. The first asset will be financed in Poland with an agreed 7% interest rate.3
v2
In terms of the long term vision beyond credit facilities for single power producers, we’re planning to build a diversified exposure to a globally distributed network of profitable Renewable Energy Sources, where protocol actors will then apply to governance to utilise principal liquidity & protocol revenue to acquire and construct new Renewable Energy Sources that will be owned by the protocol. This will enable market leading yield and the world’s first decentralized energy commons. For context, Gigawatt core contributors have previously built & commissioned into commercial production a renewables portfolio exceeding €200M.
NOTE: IRR for acquiring or constructing Renewable Energy Sources in our pipeline should not be less than 15%. The compound effect of acquiring 10s-100s of assets will be unprecedented.
Sharing below some of our team’s ongoing partnerships with Acciona Energia (one of world’s largest renewable power producers, saving 22 million metric tones of CO2 in 2022) & Nebras Power (Qatar state entity):
Final notes
A lot of the feedback we’ve received from potential investors as well as trusted founders in the network have been concrete concerns about the DeFi ecosystem on Celo. A lot of the core concerns range from a lack of liquidity, to funding for incentives & development grants.
We would love to collaborate closely with Celo governance to flip the script and become a regenerative & powerful use case on the Celo network.
Kindly awaiting your feedback, regens!
