• Big institutions such as the European Investment Bank and Santander are issuing corporate digital bonds through the blockchain to lower costs, risks, and to convey higher transparency and security to the parties. This evolution from traditional financial instruments is of great importance to the project and corporate funding industry. Although very innovative in itself, Cashmir wants to take it further by promoting the implementation of Smart Legal Contracts, adding them to the funding efforts.  This would be like injecting steroids into the funding process where contracts will automatically be executed while still being legally binding. 

• They allow banks to simplify a lot of the requirements and paperwork that can take months to complete. 

• In green bond issuance cases, most of the documents related to underwriting, subscription and the distribution of bonds can be stored on a blockchain, speeding up every part of the process because it is easier to track transactions.  

• Distributed Ledger Technology (DLT) is the key to creating trust between unrelated parties and can pave the way to increasing the number of investors in the renewables arena, who would otherwise be left out of the funding process.  For owners of the SPVs, the higher number of potential investors/lenders would increase the chances of a speedy funding process, while, at the same time, improving the funding terms and conditions to lower costs.

•  It’s important to understand the difference between a Smart Contract and a Smart Legal Contract (SLC). Whereas the former is written through coding software language and must reside in the blockchain, the SLC can be written in document type formats such as Word and PDF. In addition to the blockchain, the SLCs may also be executed through a cloud-based system like Amazon AWS or Google cloud.

• The SLCs can automatically:

•  Receive payments from construction lenders and distribute them, once specific milestones have been reached according to the auditing parties.

• Create and share alerts if production targets are not being met by interacting with IoT devices and other external sources of information such as weather changes that affect energy output.

•  Receiving incoming revenues from offtakers or other sources of income and distributing them according to what was agreed in the contracts.

• Inform and execute payments related to the supply chain of equipment and services.

• Create internal reports to the parties who participate in the governance of the SPVs.

These are just basic examples of the many tasks that can be automated through SLCs, all of which are stipulated in the contracts. Given the complexities in the process of funding in project finance and the explosive growth of the renewables space, SLCs will become a must-have in this industry.