A 3 workshop where participants will learn about:
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Structuring wind, solar, bio-mass, geothermal and small-scale hydro-power projects
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Risk assessment and allocation in renewable transactions
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Feed-in tariffs, tax credits, preferred depreciation schedules and other government incentives
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Carbon-credits and trading markets
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Cashflow analysis for renewable deals
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Debt and equity alternatives for financing renewable energy
- Case studies
Course Background
For the past decade power plants generating energy from renewable resources have found favor with lenders and investors even in difficult markets. The renewable sector has benefited both from acute growth in demand for electrical output in many countries as well as continuing concerns over fossilfuel emissions. Governmental commitments to achieving increased electrical output from renewable sources in order to meet Kyoto Treaty objectives have spurred development in Europe. In the United States numerous transactions are closing due to enhanced government stimulus programs, industry restructuring, and environmental concerns. China, India, Brazil and other emerging markets are also encouraging investment in wind, solar, geothermal and hydro power production as well as bio-mass.
Course Content
This program will discuss approaches to financing renewable projects in many parts of the world, focusing on how these transactions differ from more conventional deals. Peculiarities such as intermittency, location constraints, transmission, and interconnection will be described, as well as how renewable power purchase agreements and other project contracts are structured.
Examples of deals that take maximum advantage of the growing variety of incentives and tax-breaks will be used to illustrate principles and insure understanding. Attention will also be placed on many of the new financing vehicles in emerging markets.
Day 1
Themes: renewable financing, energy initiatives and project economics; wind projects
Overview of renewable energy project financing
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Global growth of the market
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Various types of renewable energy projects and comparative costs
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Snapshot of global incentive programs designed to encourage renewable Energy usage and investment (Europe, U.S., India, China)
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Feed-in tariffs
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Renewable portfolio standards and renewable energy credits
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Depreciation, allowances, etc.
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Financing structures and players
Risk identification and allocation in a wind project financing: different approaches/differing risks from conventional power project finance
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Construction and warranty issues
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Technology advances
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Operational issues
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Transmission, interconnection and tariffing
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PPA considerations: availability, energy and environmental credits
Workshop: cash flow modeling for varying constituencies
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Building a model: forecasting techniques and limitations
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Cashflow sensitivity analysis and creditor considerations
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Sponsor return calculations
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Tax-equity investors and considerations
Case study: Financing a wind power plant. Participants break into small groups to evaluate this security package for a wind power plant. They will look at financing choices, structure, project cash flows, and quantify their risk assessments.
Day 2
Themes: legal issues; sources of finance; hedging; solar power projects
Further legal issues and contractual considerations for wind and intermittent power producers
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Key contractual agreements and structuring considerations
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Power purchase agreements (pricing structures, milestones and penalties)
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Equipment supply and time lines
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Balance of plant agreements
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Land lease
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Shareholder structures
Bank debt and capital markets as funding alternatives
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Bank debts and syndications
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Domestic and international capital markets access:
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Eurobonds, private placements
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Market convergence
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Rating agencies, Basel II, and credit wraps
Electricity price hedging
Leasing structures for renewable projects
Solar power
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Solar photovoltaic systems and solar thermal
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Issues of scale, cost and application
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Financing challenges and PPA solutions
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Roof and ground leasing issues; other site requirements
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Technology warranties
Case study: Financing a solar park Evaluating the security package for a Photovoltaic (PV) Solar Park.
Day 3
Themes: International risks; carbon credits; hydro, geothermal, bio-mass and bio-fuel technologies
Developing projects in international markets: Sources of credit and risk support for international renewable projects
Case discussion: Costa Rican wind project
Carbon credits and renewable projects
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EU Emission Trading Scheme (ETS)
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Joint Implementation program (JI)
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Clean Development Mechanism (CDM)
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Certified Emissions Reductions (CER): issuance, monitoring and compliance
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Voluntary emissions reductions
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Project cycles and credit usage
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Examples: Wind, bio-mass, solar and hydro- projects
Base load renewable producers: geothermal and hydro plants
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Where are these facilities located?
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Technologies: Dry and flash steam plants; Binary plants
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Resource assessment and drilling risk
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Construction and transmission issues
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Government role
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Case example: Geothermal production in Nicaragua
Case discussion: Small hydro in Latin America and forward purchase of carbon credits
Biomass and bio-fuel projects
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Wood/power generation
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Bio-mass and bio-fuels: what are the prospects for these technologies?
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Emissions, waste disposal, and other regulatory issues
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Case example: Wood-fired bio-mass project
Wrap-up and self-test
Course summary and close
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Meg Osius
Margaret Osius specializes in capital markets, and risk management, as well as international project finance. She works with corporations, financial institutions, public agencies, law firms, and private equity investors. Training and advisory work has covered approaches to financing infrastructure build-out and facilities acquisition, selecting among debt, equity, and hedging alternatives, and related topics. She has considerable professional experience with the oil and gas, power, transport, and telecom sectors.
Ms. Osius began her career at JP Morgan Chase Manhattan Bank, where, as a Vice President, she structured highly leveraged transactions and project financings and advised clients on foreign exchange and other price risk management strategies. Ms. Osius was responsible for a team of analysts responsible for evaluating the quality of the bank's global loan portfolio as well as that of its newly acquired affiliates. In that role she had extensive experience with workout and distressed debt.
Ms. Osius has published articles in the business press and co-authored several self-study guides covering international project finance, trade and export finance, foreign exchange, and financial futures. The World Bank has published her articles on approaches to financial analysis in emerging markets. She is a primary speaker in a series of video sessions created to cover the topic of Sound Banking Principles during executive training sessions in Moscow.
Until 2008 Ms. Osius was Chair of the Technical Advisory Panel (TAP) of the Public Private Infrastructure Advancement (PPIAF that provides technical assistance to emerging market governments. She is a member of the council on Foreign Relations and received an M.B.A. from INSEAD, the European Institute of Business Administration. Her B.A. degree is from Princeton University.
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