Course dates
The renewable energy 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.
Course outline
This 3-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.
Participants will learn about:
- 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
- Cash flow 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
Supported by:
Day 1
Themes: renewable financing, energy Initiatives and project economics; wind projects
Overview of renewable energy project financing
- Global growth of the market
- Various types of renewable energy projects and comparative costs
- Wind powered electricity plants
- Small-scale hydro plants
- Landfill gas projects
- Bio-mass and bio-fuels
- Geothermal energy
- Solar power
- Snapshot of global incentive programmes designed to encourage renewable energy usage and investment (Europe, U.S., India, China)
- Feed-in tariffs
- Renewable portfolio standards and renewable energy credits
- Depreciation, allowances, etc.
- 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 modelling for varying constituencies
- Building a model: forecasting techniques and limitations
- Cash flow sensitivity analysis and creditor considerations
- Sponsor return calculations
- Tax-equity investors and considerations
Case study: financing a wind power plant. You will break into small groups to evaluate this security package for a wind power plant. You will look at financing choices, structure, project cash flows, and quantify your risk assessments.
Day 2
Themes: Legal Issues; Sources of Finance; Hedging; Off-shore Wind; Solar Power
Further Legal Issues and Contractual Consideration 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
Financing Offshore Wind Projects (Guest Speaker: Ulrich Winkelmann, NordLB)
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 an 8MW Photovoltaic (PV) solar park in Germany.
Day 3
Themes: International Risks; Carbon Credits; Other Technologies
Biomass and Bio-Fuel Projects
-
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
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 program (JI)
- EU emission trading scheme (ETS)
- US renewable energy credits and renewable portfolio standard
- Project cycles and credit usage
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.
Wrap-up and self-test
End of program
Berlin hotel, Berlin, Germany
This programme takes place on a non-residential basis at a central Berlin hotel. Non-residential course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.
-
Margaret E. Osius
Ms. Osius specialises in capital markets, risk management, and international project finance. She works with corporations, financial institutions, public agencies, law firms, and private equity investors. 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 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.
From 2000 to 2007 Ms. Osius was a member of the Technical Advisory Panel (TAP) of the Public Private Infrastructure Advancement (PPIAF) managed by the World Bank. In 2006 and 2007 she was the TAP’s chairperson. The fund provides technical assistance to emerging market governments in order to encourage private involvement in infrastructure development. Ms. Osius received an M.B.A. from INSEAD, the European Institute of Business Administration, in Fontainebleau, France. Her B.A. degree is from Princeton University.
Courses run by this instructor
Interested in holding this course in-house? Please fill out your details and a member of our team will be in touch with more information.
Course dates