PRESS RELEASE. Silta Finance, a new DeFi lending solution, challenges the dominance of the traditional banking sector in project finance by announcing a partnership with Singapore-based development company WEnergy Global.
WEnergy Global has agreed to explore cryptocurrency lending solutions to access project finance. The company is teaming up with Silta, a new startup linking DeFi to infrastructure finance. Silta gives DeFi lenders access to a new class of real assets, diversifying the investment universe and offering competitive interest rates. With this agreement, Wenergy Global will be one of the first borrowers to benefit from early access to Silta’s new DeFi solution.
Silta facilitates loans for the construction of various types of infrastructure assets under a project finance framework. Borrowers can submit loan applications, and Silta performs a risk analysis and performs a credit review. Based on this information, the Silta community votes on which projects to fund. Anyone with a crypto can contribute to Silta’s loan pool and receive periodic interest payments.
In addition to offering competitive loan rates, Silta aims to dramatically speed up the due diligence process. founder of Silta, Ben sheppard, with more than 12 years of experience in the field of project finance and PPP (public-private partnership), comments:
âSilta sells debt to a project developer and charges a fee for selling that debt. The difference with traditional banking services is that borrowers do not need to pay fees of up to millions just for lenders’ transaction advisory services and credit rating. High transaction costs are the main reason why small projects based on new and environmentally friendly technologies struggle to be financed. Such a light PPP is the perfect place for Silta, as banks cannot easily facilitate debt for these types of projects. “
Small PPP projects, especially those in emerging economies, do not always come with contractual intervention rights such as government-backed guarantees. Without these additional layers of protection, the risk premium charged by lenders can be excessively high, making loans unaffordable. This is what Silta aims to change.
WEnergy Global intends to apply for funding in the range of USD 8-10 million through Silta. In previous transactions with its lenders, WEnergy Global has finalized and fully repaid its loans within five years, with all payments being made on time. For its next portfolio of projects in South East Asia, WEnergy Global and Silta are targeting an interest rate of around 5 to 6% with a repayment period of 6 to 8 years.
Silta and WEnergy Global share a strong passion for ESG (Environment, Social, Governance) objectives and want to make a significant difference in people’s lives. The objective of this first cooperation is to make an impact investment in a portfolio of clean energy mini-grids to electrify off-grid communities, similar to the Sabang project in Palawan in the Philippines, a flagship project developed, co-owned and co-operated by WEnergy Global.
Silta’s vision is to provide debt financing for PPP projects below USD 100m. There will be a variety of investment products available to lenders. Some of the loan pools will contribute to high impact projects such as the ones WEnergy Global is working on. Others will aim to meet strong ESG criteria with additional benefits such as energy efficient street lighting with the potential to reduce crime rates.
On the future of project finance through DeFi, Atem Ramsundersingh, CEO of WEnergy Global and former Senior Program Director of the World Bank Group, says: Savings hopefully in real time. It will boost the sustainable lifestyles and productivity we so badly need to create this better world we all want to see. Funding will be increased by decentralized groups of investors who will accelerate the implementation of the Sustainable Development Goals.
A prototype implementation of the Silta solution will be available later this year, allowing partners such as WEnergy Global to experience the solution from its inception. With a growing number of borrowers from Southeast Asia and the MENA region showing strong interest in Silta, the goal is to symbolize the first project finance loan by the second quarter of 2022.
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