The idea

01Executive SummaryBuild better. Use less. Provide cleaner services. Measure what people use. Collect payment. Use the cash to operate, maintain and finance the infrastructure. Standardise the model and repeat it at scale.See the breakdown

02The ProblemWhat exactly is not being financed today, and why?See the breakdown

03The SUDFF ThesisLong-lived low-carbon infrastructure embedded in urban property can fall between existing financing markets when the infrastructure owner, developer, property owner, occupier, beneficiary and payer are not properly aligned. The investable asset is not simply the solar panel, battery or other green equipment. What ultimately matters to capital is the combination of the infrastructure, the contract, the customer, the payment obligation and the resulting cash flow.See the breakdown

04The Whole-Development ApproachHow many solar panels should we install? How can the entire development use fewer resources and provide the resources it still needs more efficiently?See the breakdown

The physical system

05Stage One: ReduceReduce both embodied and operational carbon before sizing the infrastructure required to serve the development.See the breakdown

06Construction Technologies and EPSSUDFF should remain technology-neutral.See the breakdown

07Stage Two: ProvideAfter demand has been reduced, the remaining needs of the development can be assessed.See the breakdown

08Stage Three: Measure and OperateInfrastructure becomes more financeable when its performance can be understood.See the breakdown

09Stage Four: FinanceInfrastructure provides a useful service. The service creates a payment obligation. The payment creates cash flow. The cash flow can support financing.See the breakdown

The structure

10The Estate Utility SPVIt is a company created to perform a particular job.See the breakdown

11Developer and Utility SeparationThe proposed model therefore separates two functions.See the breakdown

12What SUDFF May FinanceThe emerging framework separates investments into three categories.See the breakdown

13What SUDFF Should Not Automatically FinanceNot everything in a sustainable estate is a climate-finance asset.See the breakdown

14The CustomerWho receives the economic benefit, who has the payment obligation, and who can credibly maintain that obligation over the financing period?See the breakdown

15ReceivablesInfrastructure provides service. Service creates payment. Payment creates a receivable. Receivable produces cash when collected. Cash supports financing.See the breakdown

16Cash CollectionA bill is not the same thing as cash.See the breakdown

17Cash WaterfallCustomer payments are not automatically profit.See the breakdown

The finance

18CAPEX and OPEXTwo financial terms are fundamental.See the breakdown

19CFADSThe cash available to pay lenders after the relevant operating costs and required items that come before debt service have been dealt with.See the breakdown

20DSCRDoes the project generate enough cash to pay its debt?See the breakdown

21Debt Must Follow Cash FlowDo not decide how much debt we want and then force the project to carry it. Cash flow should size the debt.See the breakdown

22TenorThe cost of money matters, but the time available to repay it can matter just as much.See the breakdown

23Grace PeriodGrace does not fix an uneconomic project.See the breakdown

24Lifecycle and ReplacementInfrastructure requires replacement.See the breakdown

25Climate FinanceCatalytic capital should solve an identified market failure. It should not be used to conceal poor underlying economics.See the breakdown

26First-Loss CapitalIf certain losses occur, this capital absorbs losses before the more protected senior capital.See the breakdown

27Guarantees and Credit EnhancementSomething that makes the financing safer or more acceptable to capital providers.See the breakdown

28Current Financing PrecedentThe latest SUDFF work has incorporated a Nigerian climate-finance precedent identified during the workstream.See the breakdown

29What the Current Financial Model Has Taught UsCheap capital alone does not solve SUDFF. The amount of debt, underlying cash flow, rate and repayment period all have to work together.See the breakdown

30What the Model Is ForWhat needs to be true for this project to work? The model must be capable of saying NO.See the breakdown

31Tariffs and Customer EconomicsA financial model can always be made to look better by increasing customer prices.See the breakdown

32Existing Expenditure MattersSUDFF should not assume it is creating entirely new household expenditure.See the breakdown

Markets & climate

33New DevelopmentsOne potential SUDFF channel is New Development Infrastructure.See the breakdown

34Existing DevelopmentsA second potential channel is Existing Property Infrastructure.See the breakdown

35Climate ImpactSUDFF needs to address both:See the breakdown

36MRVMRV means:See the breakdown

37SUDFF's Proposed Capital ArchitectureA mature SUDFF transaction could potentially combine several sources of capital.See the breakdown

38ScalingSUDFF should not begin by trying to finance hundreds of estates.See the breakdown

39AggregationPutting many weak assets together does not create a strong asset.See the breakdown

40Securitisationoriginate, finance, operate, collect, measure, standardise, aggregate, refinance.See the breakdown

Saggezza's role

41Saggezza's RoleSaggezza does not need to become every company in the value chain.See the breakdown

42What Saggezza Is Not Claiming to BeSUDFF should not require Saggezza itself to become:See the breakdown

43Potential Saggezza RevenuePossible future revenue sources could include:See the breakdown

44The Innovation Thesisbuilding decarbonisation + demand reduction + shared climate infrastructure + property-level service payments + long-term infrastructure ownership + standardised underwriting + climate measurement + portfolio finance.See the breakdown

45Why Private Capital Could CareWhy should private capital enter because SUDFF exists?See the breakdown

46Why Climate Finance Could CareWhy do emissions fall because SUDFF exists?See the breakdown

Risks & the road ahead

47Key Risks and UnknownsSUDFF remains under development.See the breakdown

48What SUDFF Will Not DoThe framework should maintain several hard disciplines.See the breakdown

49Development PhilosophyDesign. Test. Challenge. Validate. Redesign where necessary.See the breakdown

50Proposed Development PathThe next development phase should progressively establish:See the breakdown

51Long-Term VisionIf early transactions prove the model, SUDFF could move from financing individual developments toward financing a portfolio of standardised urban climate-infrastructure assets.See the breakdown

52Final DefinitionThe Saggezza Urban Decarbonisation Finance Facility is a proposed financing platform for integrated low-carbon infrastructure in African urban developments. SUDFF seeks to reduce the embodied and operational carbon of buildings, reduce underlying resource demand, finance shared low-carbon infrastructure for essential services, establish measurable and recurring property-level service revenues, and use those cash flows to attract long-term private capital. Beginning in Nigeria, the model is intended to create a standardised pathway through which individual low-carbon developments can eventually be aggregated into investable portfolios. Make the development need less. Provide what it still needs more efficiently. Measure what people use. Charge transparently for useful services. Use those revenues to operate, maintain and finance the infrastructure. Prove the model, standardise it and repeat it at scale.See the breakdown