Offtake-Linked CAPEX Structure

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Below is an Offtake-Linked Capex Structure designed specifically for Saudi commodity trading arms / family offices, aligning capital deployment directly to contracted offtake, not speculative expansion.
This is boardroom- and bank-ready, and fits cleanly with Shariah, asset-backed, and trade-finance logic.

OFFTAKE-LINKED CAPEX STRUCTURE

Agarwood & Supercritical CO₂ Extraction (SFE)
(Saudi Partner × CESI)

1. What “Offtake-Linked Capex” Means

Capital expenditure is released only when offtake is secured.

No offtake → no capex
More offtake → incremental capex

This converts capex from risk capital into demand-backed infrastructure.

2. Core Principle (Trader Logic)

Instead of:

Build capacity → hope to sell

This structure follows:

Secure buyer → fund equipment → deliver product

This mirrors commodity terminals, refineries, and logistics assets.

3. Capex Tranching Framework

Base Capacity (Tranche 1)

• Trigger: Signed take-or-pay offtake
• Volume: Anchor commitment (e.g. 60% of initial output)
• Capex Use:
  • 1–2 SFE units
  • QA/QC systems
• Ownership: Asset SPV (Saudi-secured)

➡ Low risk, immediately cash-generative

Expansion Capacity (Tranche 2+)

• Trigger: Additional offtake or volume increase
• Capex Release: Proportional to new volume
• Pricing: Same floor + upside formula
• Returns: Higher IRR due to utilization certainty

➡ Growth only when demand is locked

4. Capital Flow Logic

Saudi Offtake Commitment
        │
        ▼
   Capex Approval
        │
        ▼
 Equipment SPV Funding
        │
        ▼
  SFE Equipment Installed
        │
        ▼
 Production → Offtake → Cash

Capex is pulled by contracts, not pushed by forecasts.

5. Capex Security Stack

Each capex tranche is secured by:

1. Signed offtake agreement
2. First lien on SFE equipment
3. Title retention on produced extracts
4. Escrowed offtake proceeds
5. Step-in rights

This makes each tranche independently financeable.

6. Returns by Capex Tranche

Tranche	Offtake Coverage	Target IRR (USD)	Risk
Tranche 1	60–70% contracted	12–16%	Low
Tranche 2	70–80% contracted	14–18%	Low–Moderate
Tranche 3+	80%+ contracted	18–22%	Moderate

Higher utilization = higher return, not higher risk.

7. Shariah Alignment

• Capex tied to real assets
• Income from sale of goods / usufruct
• Take-or-pay reflects capacity reservation, not riba
• Risk shared through Mushārakah + Bayʿ

This structure is Shariah-clean by design.

8. Why This Works for Saudi Capital

• Preserves capital discipline
• Matches trade desk risk appetite
• Simplifies internal approvals
• Enables co-financing with Islamic banks
• Scales without balance-sheet stress

9. One-Line Investment Logic

Every dollar of capex is activated by a buyer, secured by equipment, and repaid by contracted trade flows.

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