A strategic framework to understand the business models, financing instruments and deal structures peculiar to renewable energy projects.
Using a financial model to structure financing, make lending decisions and to assist in driving down prices, particular in auctions.
Learning Objectives
- Build a financial model that reflects the underlying business and commercial reality.
- Use results from comprehensive risk assessment and financial model in business cases, capital structuring, bid preparations and investment decisions.
- Understand how to value managerial flexibility (e.g. option to abandon project, sell project after commissioning or re-finance debt)
Renewable Energy Financing & Modelling (3-5 days)
Understanding and modelling of renewable energy projects of all sizes:
1. Renewable Energy Resources & Technologies
- Solar photovoltaics, wind, hydro, tidal stream, concentrated solar thermal, renewable heat, biomass, biofuels, waste-to-energy, geothermal, hybrid solutions;
- Estimation of annual energy production and variability;
- Measures to compare projects and technologies.
3. Business Model
- Revenue models: sale of turn-key plant, sale of power and availability, pay-as-you-go, leasing
- Pricing in renewable energy projects: feed-in tariffs, auctions, whole-sale
- Financial model drivers: fixed and variable costs, major maintenance requirements, tax;
- Other sources of income: carbon credits, tax credits.
4.Financing
- Financing instruments: equity, loan, bond, leasing structures, guarantees, Islamic financing structures;
- Modelling debt: repayment methods, interest calculations, credit ratios.
- Debt sculpting and debt optimization in financial model
5. Modelling
- Objectives of a financial model;
- Building cash flow model in Excel that reflects the business model and choice of financing, project milestones as well as taxation and variations over time;
- Deal structuring: mutliple equity partners, multiple debt funders and offaker’s view;
6. Structuring & Investment Decisions
- Using the model to structure a deal that allows both investors and lenders to participate;
- Applying uncertainty in annual energy production to lending decisions;
- Re-financing debt, secondary equity sale.
7. Risk Assessment & Strategy
- Identification of risks, including credit, market, interest, infrastructure, engineering, liquidity, supply, currency, political and environmental;
- Discussing structures to allocate, finance or mitigate risk and impact on financial model.
8. Using the Model Output
- Sensitivity analysis: computing impact of changes in parameters on key project metrics;
- Scenario analysis: comparison of EPC offers or term sheets;
- Monte-Carlo analysis: estimating likelihood of reaching a target rate of return taking into account annual variability in supply of renewable power.
9. Other Topics
- Financing merchant power projects;
- Hybrid solar / diesel / battery systems: estimating annual energy production with curtailment as well as fuel savings.
Who should attend?
- Investment analysts
- Project developers and CEOs
- Business and strategy analysts
- Business development managers
- Debt analysts
- Financial analysts
- Engineers
How the course is delivered
The mode of delivery is in-class, in-person at the course venue, with the option of participating virtually.
This course does not have any sections.
