Wednesday, February 01, 2006

Peak generator in SA for $25M

this diesel generator was sold for $25M with financial caps sold to finance it.
Caps are financial products where you purchase the right to not pay more than $x for something, i.e. you are insuring yourself against upward volatility in prices. Floors are the reverse where you buy the security of not having the price of something drop below a certain level. A collar is a floor+cap, where the floor is raised to the point where it subsidises the price of the cap - this gives you a great deal of certainty on your price but you are less able to take advantage of the swings - but of course, that's the whole point...

Now imagine replacing a dirty crappy diesel genset with a hundred or so distributed fuel cell systems - clean, quiet and modular... ahhh bliss.

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