Renewable Energy Financing & Modelling

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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.

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