The reason we can offer to reimburse full initial capital after 3-5 years is because we will not have to pay out of our own existing resources, but instead we will simply on-sell the Bulk Lots in question at existing market price alongside the water volume we are anyway supplying to bulk consumers directly from our pumped underground reservoir . . . so instead of pumping and selling (say) 5 million litres directly from the aquifer in any given year, we can comfortably take back (say) 50,000 litres from a client @ original 15p/liter which we move on to consumers @ same 15p/litre alongside 4 million 9 hundred and 50 thousand litres pumped up from underground also @ (say) 15p/ litre. So there is no actual capital risk to us, we simply put the returned Lots into the consumer supply chain in substitution for the equivalent pumped volume – the required sum for investment repayment will just be a trade off directly against the realisable consumer sales revenue so there would be no capital drawdown implication for Renaissance.
Regarding feasibility of up to a 70% aggregate return, here is how it works . . .
- 5 years of annual substitution fees @ 7.69% p.a. = 38.45% in aggregate over the full period.
- In addition, investors are currently buying Bulk Lots @ just 15p per litre whilst the current local market retail price is 75p per litre.
- It is reasonable to assume some price escalation over the next five years since potable water is becoming increasingly scarce whilst demand is actually escalating so it is not unreasonable to expect at least a modest appreciation in the core value of the bulk water supply.
- If one accepts that to be the case, projecting an increase in retail value of only 5p (just 6.66% increase on retail or just 1.33% per annum over 5 years) would actually represent an appreciation on the original 15p investment value of 33.3%.
- Add the 33.3% price appreciation to the 38.45% annual substitution fees and you get 71.75% aggregate return potential over 5 years growth.