Renewable Energy Project Finance
Starting dates and places
Description
A 3–day financial training workshop You will learn about: Structuring renewable energy projects: - Wind - Solar power and Hot Water heating - Biomass - Small hydro - Geothermal - Landfill gas - Waste to energy Risk assessment and allocation in renewable transactions. What incentives? What countries? Carbon–credits and trading markets. Cash–flow analysis and structuring alternatives. Debt and equity alternatives and incentives. Commodity price hedging for wind and other deals. Managing international risks. Course background In 2008 an estimated USD120 billion was invested new renewable assets, projects and biofuels globally. Despite enormous potential to produce more electricity from abundant…Frequently asked questions
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Day 1 Themes: renewable financing, energy initiatives and project economics; wind projects in detail Overview of renewable energy project financing Global growth of the market Various types of renewable energy projects Comparative costs per installed MW and ‘levelised’ energy costs Wind farms Solar power and solar water heating Bio-mass Small-scale hydro plants Geothermal energy Municipal waste, land-fill gas and other waste Incentive programs (Europe, US., India, China, South Africa, Morocco, Kenya and others) Feed-in tariffs Renewable portfolio standards and renewable energy credits Tax incentives, depreciation, allowances, etc Competitive tenders Financing structures and players Risk identification, allocation, and structuring considerations in a wind project Different approaches/differing risks How do risks differ by technology? Construction and warranty issues; turnkey, equipment supply and balance of plant contractual bifurcation Technology advances and operational issues, standard performance guarantees (wind compared to solar and other) Transmission, interconnection and tariffing PPA considerations: availability, energy and environmental credits Workshop: cash flow modelling for renewable projects Building a renewable model Forecasting techniques and limitations Key features and sensitivities Cashflow analysis and creditor considerations Sponsor return calculations Tax-equity investors vs. strategic investors Case study: financing a wind farm Participants break into small groups to evaluate this security package for a wind facility. They look at financing choices, structure, project cash flows and quantify their risk assessments. Day 2 Themes: legal issues; sources of finance and credit enhancement; solar powerFurther legal issues and contractual considerations. 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 the disappearance of syndications Club deals in the renewable sector and most active banks Domestic and international capital markets access Eurobonds, private placements Rating agencies, Basel II, and the demise of credit wraps Electricity price hedging for credit enhancement 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 and technologies Solar photovoltaic systems and solar thermal Issues of scale, cost and application of different technologies Crystalline and thin film Concentrating solar power Insolation measures and considerations Financing challenges and ppa solutions Roof and ground leasing issues; other site requirements Environmental and permitting issues Panel and other equipment warranties Case study: financing a Solar Park. Evaluating the security package for a Phoovoltaic (PV) Solar Park. Participants will construct a simplified a cash flow model to estimate revenues and costs as well as debt capacity and investor returns Day 3 Themes: international risks; carbon credits; hydro-and geothermal projects Biomass projects Co-firing wood for power generation Most common issues and problems with these facilities Emissions, waste disposal, and other regulatory issues Case examples: wood-fired bio-mass Bio-fuels: what are the prospects for these technologies? Developing projects in international markets: sources of official support for international renewable projects Official funds providers and political risk enhancers Development banks and other IFIS ECAS and others Private political risk coverage and providers Carbon credits and renewable projects Growth of the carbon credits market and prospects beyond 2012 Suppliers, intermediaries, and end users EU emission trading scheme (ETS) and clean development mechanism (CDM) ‘Project cycle’ and qualifying for certified emissions Calculations of carbon reductions for various energy projects Issues of doe validation and verification and liability Monetising carbon credits and negotiating an emissions reduction purchase agreement (‘ERPA’) Risk insurance for carbon credits? Case Example: Comparing increases to investor return and incremental debt capacity for a small-scale hydroproject with a signed ERPA. Base-load renewable producers: geothermal and hydro plants Where are these facilities located? Technologies? Geothermal dry and flash steam plants, binary plants. Resource assessment and risk. Construction and transmission issues. Government role. Example: geothermal production in Nicaragua. Case study: financing a small-scale hydro-electric facility. Considering risks of financing a small-scale hydro plant. Evaluating plans for hard currency generation though sale of carbon credits. Course summary and close
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