Capital Structure: Share Capital vs Loan Capital

Real-World Scenario: "GreenEnergy Co" – Capital Structure in 2025

#By Grok
Company: GreenEnergy Co – a mid-sized solar + battery storage developer
Goal: Raise $150 million to build 3 large solar farms in the US Southwest
Date: December 2025
They decide on a mixed capital structure (very typical for renewable energy projects):

Source of Capital	Amount (USD)	Type	% of Total Funding
Equity from investors (Share Capital)	$45,000,000	Equity	30%
Bank term loan (20-year)	$75,000,000	Loan Capital (senior debt)	50%
Green bonds issued to public	$22,500,000	Loan Capital (subordinated)	15%
Tax equity investor	$7,500,000	Hybrid (counts as equity for this chart)	5%
Total	$150,000,000		100%

For simplicity in the pie chart, we group it into just two categories that matter most to the founders and lenders:

• Share Capital (Equity) = $45M + $7.5M = $52.5 million (35%)
• Loan Capital (Debt) = $75M + $22.5M = $97.5 million (65%)

This 35/65 equity-to-debt ratio is extremely common in project-financed renewable energy in 2025.

What the Pie Chart Looks Like (description if you run it)

• A clean, professional pie chart
• Equity slice (green) is noticeably smaller → 35%
• Debt slice (red) dominates → 65%
• Dollar amounts and percentages clearly labeled on each slice
• Title and legend make it perfect for investor presentations or a pitch deck

This exact 35/65 split is what banks and rating agencies love to see in renewable projects because:

• Enough equity “skin in the game” (at least 20–30%)
• High loan capital leverage keeps the return on equity very attractive (often 12–18% IRR)

Python Code by Grok

import matplotlib.pyplot as plt

# ============== GreenEnergy Co – Capital Structure 2025 ==============
labels = ['Share Capital\n(Equity)', 'Loan Capital\n(Debt)']
sizes = [52.5, 97.5]        # in millions
colors = ['#4CAF50', '#F44336']  # Green for equity, Red for debt
explode = (0.1, 0)  # slightly separate the equity slice

fig, ax = plt.subplots(figsize=(9, 7), dpi=120)

wedges, texts, autotexts = ax.pie(sizes, explode=explode, labels=labels, colors=colors,
                                  autopct=lambda pct: f"${pct*1.5:.1f}M\n({pct:.0f}%)",
                                  startangle=90, textprops={'fontsize': 14, 'weight': 'bold'},
                                  wedgeprops={'linewidth': 2, 'edgecolor': 'white'})

# Make the percentage text white and bolder
for autotext in autotexts:
    autotext.set_color('white')
    autotext.set_fontsize(13)

ax.set_title('GreenEnergy Co – $150M Project Funding Breakdown (2025)\n'
             'Share Capital vs Loan Capital', fontsize=16, fontweight='bold', pad=20)

# Legend with exact amounts
ax.legend([f'Equity (Share Capital)     – $52.5 million (35%)',
           f'Loan Capital (Debt)           – $97.5 million (65%)'],
          title="Breakdown", title_fontsize=13, fontsize=12, loc="lower left")

plt.tight_layout()
plt.show()