CNG Delivery Financing

Financing Options

CNG Delivery Financing Options

At CNG Delivery we eager to help you all the way. It is important to seek assistance from a lender who is experienced in funding CNG delivery operations, understands the specifics of this industry segment business and has a strong track record of successfully guiding government and commercial entities towards their financial objectives.

CNG projects are becoming more complex to finance, with shorter contracts, rising competition, and increased uncertainty surrounding project success, making the banking sector more cautious. As demand for CNG grows and pricing remains competitive, securing project financing requires a new approach tailored to these market conditions.

CNG projects can be financed either through developers’ direct funding, using accrued cash or corporate credit lines, or via limited recourse project finance structures. This method, commonly used when developers need to protect themselves from contingent liabilities or are unable to borrow sufficient capital, relies on projected cash flows and typically involves creating special purpose vehicles. These structures are often used when developers need to mitigate risk during the construction phase, as EPC (engineering, procurement, and construction) contractors are generally not large enough to bear such risks. Consequently, most CNG project financing tends to be limited recourse, with guarantees in place during construction.

Project finance has been the predominant structure for large-scale CNG projects. While direct funding has been used in some cases, project finance has enabled the industry to raise billions for major projects, especially with commercial banks, export credit agencies, and development banks as key contributors. The presence of long-term supply contracts underpins much of the funding for CNG projects, providing security to lenders by ensuring cash flow predictability. However, as the market shifts toward shorter contracts, developers must adapt to new financial models that may include a mix of short- and long-term agreements with varying risk levels.

In the evolving CNG market, financing structures are adapting to new challenges, such as shorter contract lengths and the entry of new buyers with varying credit ratings. The traditional reliance on long-term contracts with investment-grade counterparties may give way to more flexible models, including partial merchant financing. While this transition is uncertain, developers and financiers must work together to create innovative solutions that align with the new market realities.

We have financing partners to assist you through the entire process: from researching options and the application process to ongoing budget and payment planning.

CNG Delivery financing options come from a small network of lenders that are seasoned in financing CNG delivery commitment and equipment and can develop the right loan package for you. Whether you are looking to sign for CNG delivery services, needed retrofit equipment finance, or construct a new site, we can assist you with finding financing that meets your needs.

Based on your financial strength, project capital requirements, geographical location, and etc, CNG delivery can refer you to one of our financial partners ranging from small local privately owned bank to large worldwide recognized financial institution. CNG delivery financing and CNG equipment leasing offers attractive options for customers who want to realize fast returns on their investment when switching to CNG use. By focusing on utilizing delivered CNG and finding a partner to finance or invest in CNG delivery set up to serve your business operation you minimize your financial exposure and spread the risk. You can start saving on fuel costs right away, to create the beneficial financial returns that come with using CNG fuel.

CNG Grants and Incentives for improved IRR:

Compressed Natural Gas (CNG) delivery projects often fall within the realm of government support due to their contributions to reducing carbon emissions and promoting cleaner energy alternatives. Depending on your location, there are several grants, incentives, and programs that could support CNG delivery projects. Here are some common types of programs found in many countries:

1. Federal or National Grants and Incentives:

Clean Energy Incentive Programs: Many governments have clean energy initiatives aimed at reducing greenhouse gas emissions. These can include tax credits, low-interest loans, or direct grants for the purchase of CNG vehicles, fueling infrastructure, or other related technologies.
Alternative Fuel Infrastructure Tax Credits: In some countries, businesses that install refueling equipment for CNG vehicles may be eligible for tax credits covering a percentage of the installation costs.
Environmental Protection Agency (EPA) Programs: Agencies like the EPA may offer funding programs for projects that aim to reduce emissions through alternative fuels, including CNG. These funds can be used for CNG vehicle purchases or conversion kits.

2. Local or Regional Grants

State/Provincial Clean Energy Funds: Many regions have established funds to promote clean energy and alternative fuels. These programs can offer rebates, grants, or loans to businesses investing in CNG-related projects.
Emission Reduction Incentives: Regional governments may offer incentives to reduce emissions from transport, targeting CNG as a clean alternative fuel. These incentives often take the form of subsidies or tax reductions.

3. Industry-Specific Programs

Transportation Sector Programs: Some programs specifically target fleets, logistics, or public transportation sectors. Companies delivering CNG can apply for grants to cover the cost of vehicle conversion or new CNG vehicle acquisition.
Agricultural and Rural Development Programs: Rural or agricultural energy programs may support projects that help reduce fuel costs and emissions, particularly if the CNG project serves these sectors.

4. Carbon Offset Programs

Carbon Credits: CNG delivery projects that reduce greenhouse gas emissions can generate carbon credits, which can be sold to other companies to offset their emissions.
Greenhouse Gas Emission Reduction Programs: Some governments and international organizations offer funding for projects that help reduce GHG emissions.

5. Research and Development Grants

Innovation Funds: If your project involves innovative technology, research, or development related to CNG (e.g., improved delivery mechanisms or fuel efficiency), you may qualify for R&D grants.
University Partnerships: Partnering with academic institutions on CNG technology development could also provide access to joint funding opportunities.

6. Fuel Duty and Excise Reductions

Fuel Tax Rebates: In some countries, alternative fuels like CNG are taxed at a lower rate compared to conventional fuels, providing a cost advantage for CNG delivery operations.
Excise Duty Exemptions: Some governments offer excise duty exemptions on CNG to promote cleaner fuel options.

7. Energy Efficiency Programs

Energy Savings Performance Contracts (ESPCs): In some cases, energy savings from CNG projects can be financed through ESPCs, where the cost savings from improved efficiency cover the project’s cost over time.

How to Find Relevant Grants and Incentives

Government Portals: Check federal, state, or regional websites dedicated to energy and transportation grants.
Industry Associations: Associations for natural gas, clean energy, or logistics industries often list grants and incentives.
Energy Service Companies (ESCOs): These organizations may also have partnerships or knowledge of financing options for CNG projects.

Based on the project specific country or region, or application CNG Delivery can help narrow down potential grants and incentives tailored to project location.

Partnerships Options

CNGDelviery applies decades of project development experience and extended rolodex of connections with experiences in energy transition funding providers. Building strong partnerships and relationships allows CNG Delivery to bring in strategic investment partners who fund high-quality projects quickly and efficiently. By facilitating capital infusion for developers, we are investing in the teams that play a vital role in driving the energy transition forward. Together, we are tackling the climate crisis, ensuring equitable access to clean energy for all, and fostering diversity within the renewable energy industry. Our streamlined processes empower our partners to focus on their expertise—project development—while our team delivers resource support and seamless access to capital.

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