Announcing In3 Capital Group’s Impact Guarantee Fund (IGF)
Press Release
Monterey Bay Area, California
4 March 2024
Impact Guarantee Fund (IGF) uses a novel structure to accelerate mid-market sustainable infrastructure and “regenerative” real estate project finance worldwide.
IGF’s main advantage is a known private family office (FO) partner reliably delivering cash capital for investment in projects at attractive terms & conditions, up to 100% of the required funds, when project developers meet stringent requirements. In3’s capital partner provides this funding when asset-backed pledge pool participants secure completion of the construction phase.
Why this approach? The FO is essentially the developer of record, using established credit facilities plus holdings to fund client projects, so this Impact Capital Guarantee (ICG) helps keep everyone’s “eyes on the prize” — completed construction and commissioning of new assets, invariably worth far more than the unassembled components. For us, it filters out fraud and with comprehensive insurance and IGF’s structure, offers step-in rights in the unlikely event of ownership restructuring before completion.
This guarantee, in turn, enables access to funding with far more consistency (Terms & Conditions) and flexibility (state of readiness, sector diversity/IRRs, geographic factors like currency, owner equity, operational risk), than the traditional project finance route. By the time these factors are an “exposure” for the FO, the guarantor’s part is finished — the guarantee is allowed to expire after Commercial Operation Date (COD).
This approach to sustainable/impact investing delivers triple bottom line returns, throwing off cash to the guarantor from the start. Guarantors mainly leverage non-cash assets under a securitized arrangement.
2024 “Hot” Sector Focus
In3 has been at this for a while. We know a solid opportunity when we see one, and our track record proves this.
For example, a portfolio of 16 “turnkey” waste tire projects convert old tires into the raw materials of new tires, with valuable bonus co-products (beyond carbon black and steel) using breakthrough, 5th generation technology. Pledge assets equal to roughly 70% or more of the project budget for 1-2 years at a time and realize $25M-$40M per year cash dividends.
Check out this short video and be in touch to ask questions or to take next steps:
Individual project budgets range from $115M – $300M per site, with 16 sites that are institutional quality and investment- or guarantor-ready, the first one is based in the US and offers substantial pre-arranged tax equities as an added incentive.
Building most infrastructure construction projects typically takes 1-3 years to complete, and these tire conversion projects are now fully insured (MunichRe) as well as the EPC’s bonding. The world-class lead engineering firm is prepared to launch a new project each quarter, enabling guarantees to be repurposed in a multi-wave pattern of value and virtue.
This long-standing tire recycling (more properly closed-loop “upcycling”) isn’t going to solve itself. Why not benefit from backing the leading 5th Generation solution, likely to become the standard the offtakers’ industries adopt. Although certainly not a “winner takes all” market, the carbon advantages from not combusting the liquid as fuel is worth noting.
About In3 Capital Group
In3 is a non-bank financial institution established in 1996 whose aim is to promote economic development, increase employment and wages to reduce poverty, stem climate change, and other strategies to help achieve the Sustainable Development Goals (SDGs). We assist guarantors by introducing opportunities to align with highly qualified projects/developers that have strong potential to rapidly scale deployment of private capital in the impact investing space.
Further Background & Analysis: Risk Profile
All projects within the IGF mandate (often scalable due to replicability across diverse locations, or expandable at the same location) where a “completion assurance” guarantee makes the developer/owner obligations unmistakably clear: either they cooperate with contractors and stakeholders to deliver the operating project, or they opt out. In the unlikely event that the developer does not deliver, guarantors are given pre-arranged step-in rights to reorganize and redistribute the project asset ownership.
Each project yields positive impacts on multiple forms of capital — natural, social, human, constructed, and financial — that amplifies revenue and ESG, while not just living within sustainability thresholds but actively reducing emissions or drawing down carbon over the longer-term by preserving trees, regenerating soils, or building other nature-based carbon sinks.
In the case of converting old tires into new ones, these cutting-edge industry practices shift away from “virgin” natural rubber to recovered resources, and je;[ achieve multiple UN Sustainable Development Goals (SDGs). These showcased projects also happen to deliver strong social and environmental benefits, as current tire recycling practices are highly inadequate (“cut and bury” or other forms of stockpiling), while the tire manufacturing industry prefers procurement of recovered materials instead of using the “virgin” equivalent. The result is a staggering 85% reduction in the CO2 generated to make each tire, but that’s just the beginning.
Co-products further reduce each plant’s carbon footprint through fractionation (not burning) the liquids produced by the employed thermochemical decomposition, a proven, cutting-edge, 5th generation technology.
About IGF Guarantees
In3 Capital’s Impact Guarantee Fund LLC (IGF) is intended to increase access to private funding for exceptional-quality infrastructure projects like these, with global reach, providing certainty and comfort for both guarantors and investors that the project value will be delivered.
A “demand guarantee” (such as the preferred Uniform Rules for Demand Guarantees, or URDG) balances the legitimate interests of both issuer and beneficiary (In3’s capital partners), putting the burden of proof of any wrongdoing on us, protecting the applicant/guarantors from unjustified calls. It is rare for such guarantees to result in a claim, and in practice, we would have no reason to. Any issues that arise during construction (while the instrument is operative) get worked out cooperatively.
For more on URDG ICC 758 see this article, or for third party legal review visit www.reedsmith.com/en/perspectives/2010/07/urdg-758–a-facelift-for-the-demand-guarantee-rule
These short-term guarantees are used during the construction phase only, inducing the parties to work together to resolve any issues that arise. The developer and construction team often arrange insurance (completion bonds) for the developer’s benefit, which is an additional layer of protection for the involved stakeholders. The market needs impact infrastructure and sustainable manufacturing into the US$ trillions range. Progress has been too slow. We are at an inflection point in several industry sectors that now have proven solutions to combat climate change, such as the need for soil regeneration, sustainable food systems, water and energy security, reforestation and more.
Contact In3’s managing partner Daniel Robin to request our prospectus (full Private Placement Memorandum) or to explore further. You are advised to also consult with your own legal and financial professionals.
This is not an offer to buy or sell securities.