Renewable Energy Project Finance

Power plants generating energy from renewable resources such as wind, bio-mass, hydro- and solar-technologies have found favor with lenders and investors even in recent difficult markets. The renewable sector in Europe has benefited from environmental concern over fossil-fuel fired plants, further encouraged by European-wide and single-nation commitments to achieving electrical output from renewable sources in order to meet Kyoto Treaty objectives. The United States, China, India and many other markets are also developing very quickly due to government support schemes, driven by environmental concerns, industry restructuring considerations, and investor-owned utility commitments to adding renewables to the resource mix. This three-day program will discuss approaches to financing wind, biomass, solar and other renewable projects in many parts of the world; focusing on how these transactions differ from more conventional thermal-based deals. Peculiarities of such transactions like resource intermittency, location constraints, transmission, and interconnection will be described, as well as renewable power purchase agreements, and other project contracts. Examples of deals that have been structured to take maximum advantage of the growing variety of global incentives and tax-breaks will be used extensively to illustrate principles. Attention will also be placed on many of the new and emerging financing vehicles and support schemes. What will you learn? Structuring Renewable Energy Projects: Wind, Biomass, Solar, Small-Scale Hydro, Landfill Gas and Geothermal Risk Assessment and Allocation in Renewable Transactions Incentives: Feed-in tariffs, Renewable Portfolio Standards, Subsidies and Grants, Tax Credits, Depreciation Schedules, and others Carbon-Credits and Trading Markets Cashflow Analysis and Structuring Alternatives For Renewable Transactions Debt and Equity Alternatives and Incentives Commodity Price Hedging for Wind and Other Deals Managing International Risks Break-out Case Studies: Wind Power, Bio-Mass, Hydro and Solar Projects Who should attend? We strongly advise the following professionals to attend: Project Finance Managers Credit Managers Securities Managers Corporate Banking Officers Financial Analysts Strategic Planners Senior Executives Legal Advisors Business Analysts Consultants Supported By:
Day 1 Themes: renewable financing, energy initiatives and project economics; wind projects An overview of renewable energy project financing Global growth of the market: countries, sectors, drivers of growth Various types of renewable energy projects and comparative costs - Wind powered electricity plants - Solar power - Landfill gas projects - Bio-mass and bio-fuels - Geothermal energy - Small-scale hydro Snapshot of global incentive programmes - Feed-in tariffs - Renewable portfolio standards and renewable energy credits - Depreciation, tax allowances, etc. - Public tendering - Other grants and incentives by country Financing structures and players Risk identification and allocation in a wind project financing: different approaches/differing risks from conventional power project finance Construction and warranty issues Technology advances Operational issues Transmission, interconnection and tariffing PPA considerations: availability, energy and environmental credits Workshop: cash flow modeling for varying constituencies Building a model: forecasting techniques and limitations Cashflow sensitivity analysis and creditor considerations Sponsor return calculations Tax-equity investors and considerations Case study: Financing a wind power project Participants break into small groups to evaluate this security package for a wind farm. They will look at financing choices, structure, project cash flows, and quantify their risk assessments. Day 2 Themes: legal issues; sources of Finance; hedging; bio-mass and bio-fuel projects; solar power Further legal issues and contractual considerations for wind and intermittent power producers Key contractual agreements and structuring considerations Power purchase agreements (pricing structures, milestones and penalties) Equipment supply and time lines Balance of plant agreements Land lease Shareholder structures Bank debt and capital markets as funding alternatives Bank debts and syndications Domestic and international capital markets access: - Eurobonds, private placements Market convergence Rating agencies, Basel 2 Electricity price hedging Commodity pricing and hedging mechanisms Gas and heat-rate hedges for wind and other renewable energy projects Leasing structures for renewable projects Leasing structures and applications in renewable projects Evaluating cost Case examples: wind and solar Solar power Solar photovoltaic systems and solar thermal - Issues of scale, cost and application - Financing challenges and PPA solutions - Roof and ground leasing issues; other site requirements - Technology warranties Financing standards and requirements; DSCRs etc. Case study: Financing a photo-voltaic solar park Evaluating the security package for a 8MW photovoltaic (PV) solar park in Germany. Day 3 Themes: international risks; carbon credits; other technologies Developing projects in international markets: sources of credit and risk support for international renewable projects Official political risk enhancers (ECAs, development banks) and others Accessing local capital markets in developing countries Case discussion: Costa Rican wind project Carbon credit trading and renewable projects Clean development mechanism (CDM) Certified emissions reductions (CER): issuance, monitoring and compliance Joint implementation programme (JI) EU Emission trading scheme (ETS) US renewable energy credits and renewable portfolio standard Project cycles and financing implications Base load renewable producers: geothermal and hydro plants Where are these facilities located? Technologies: dry and flash steam plants; binary plants Resource assessment and drilling risk Construction and transmission issues Government role Case example: geothermal production in Nicaragua Case discussion: small hydro in Mexico and forward purchase of carbon credits Case study: Financing a small-scale hydro facility Participants will evaluate the financing package for a small-scale hydro facility in Latin America. Transaction requires political risk mitigation as well as consideration of merchant power project risks. Biomass and bio-fuel projects (Ulrich Winkelmann, Nordlb) Wood/power generation Bio-mass and bio-fuels: what are the prospects for these technologies? Emissions, waste disposal, and other regulatory issues Case example: wood-fired bio-mass project in Belgium Course summary and close