Financing renewable energy

See more French version

Financial solutions, risk management and market players

Course objectives

By the end of the course, delegates will be able to:

Understand the changing economic and regulatory context of the renewable energy markets and their impact on project financing
Source and structure financing packages for renewable energy projects, whether through banks, bonds, investments funds or state supported organs.
Approach and cooperate with the major debt and equity players financing projects in the various renewable energy sectors: solar, wind, storage, hydro and biomass.
Understand the architecture renewable energy business models and business plans and corresponding ratios

Benefits for you

Systematic use of practical case studies designed out of real life market transactions
Videos covering recent market developments
A glossary to help you master the Anglo-Saxon terminology of RE project financing.
Quizzes to keep track of your learning
Sharing experience with participants and your coach on their respective market practices.

Duration

Two days to be determined according to your schedule.
Teaching method: face-to-face in - house training with a maximum of 10 to 12 delegates per session.

Who should attend?

This course is aimed at all Renewable Energy (RE) players as well as investors looking for diversification and in particular at :

Project developers and sponsors
Engineering companies working on renewable energy tenders
Independent power producers operating in France and abroad
Local authorities working on energy projects
Notaries and lawyers specialising in renewable energy
Banks and investment funds financing renewable energy projects

Course program

Intro:

The renewable energy market is characterized by rapid growth in generation capacity, combined with a sharp fall in project costs and changes in the price per kWh in line with wholesale electricity markets;

Review of the impact of the monetary crisis (inflation, rising interest rates) and the energy crisis on renewable energy projects.

1. The risk / return approach to projects. How banks organise their due diligence for renewable energy projects? Your Data Room structuring

Technological risks Case study: financing a floating wind project

Administrative and regulatory risk (permitting issues)

Market focus on regulatory incentives that support the development of renewable energy. Focus on recent calls for tenders

Resource risk (wind, solar, biomass inputs). Modelling scenarios (P50 – Stress test P90) and their impact on financing.

Operation and maintenance risk (particularly for offshore projects)

Market risk: Focus on feed-in tariffs vs. merchant tariffs. CPPA and Virtual PPA’s. “Revenue stacking” issues.

Case study on the financing of a RE project combining CPPA and merchant risk

Market risk: issues linked to aggregators and the end of regulated tariffs. Workshop on Corporate PPA’s

Political risks

Environmental and social risks. Environmental covenants, Equator Principles, Net Zero Banking Alliance.

2. The economic model of a RE project.

Introduction on IRR and WACC

Treatment of CAPEX, OPEX

Standard ratios (DSCR, LLCR, D:E) and covenant fixing

Debt sizing methodology via CFADS,

Amortization scenario. PLCR and Financing “negative tail” projects

Sensitivity scenarios used by banks to stress their models.

Cash waterfall contractual arrangements: DSRA reserve account ts,MRA, dividend lock up, cash sweep etc

Workshop in small groups on the cash-flow model for financing a solar (PV) project. Reviewing the architecture of a bank model. Sensitivity scenarios, Source & Uses chart, Debt sizing & amortization

3. Reviewing Terms sheets. Loan doc negotiation.

Lenders, underwriter, Agents, hedging counterparties: Who does what?

Subordinated debt schemes: Senior, Junior & mezzanine and related inter creditor agreement

Term sheet key terms: Loan purpose, Debt disbursement schemes, Conditions Precedent (CP’s), Debt amortization schemes, Cash sweep, DSRA & MRA agreements, Security package, Hedging agreements, Cases of default

Case study: setting up and negotiating a bank term sheet for a wind farm project.

Conclusion: Financial market perspectives

Course evaluation

Our Renewable Energy clients’ references:

EDF Renouvelables, Amarenco, Suez, Valeco, Commission de Régulation de l'Énergie, Apex Énergies, Akuo, La Compagnie du Vent - Engie, CEPAC, Vensolaire, Boralex etc

Your seminar coach:

The seminar will be conducted by Sylvaine Chubert*, Executive Trainer and consultant in International Finance, France – the Netherlands

Ms Chubert has a twenty – year experience in International Banking, specifically in Structured Finance applied to export transactions as well as large project (Real estate) financing.
She has worked for BNP Paribas (Paris and Amsterdam) in Commercial corporate lending, Rabobank International as Area Manager structuring international trade finance deals on Central and Eastern Europe and lately at Bouwfonds Property Finance and ING Real Estate as Senior Loan adviser, structuring, financing and advising on risk management of large (USD 50 to 500M) commercial R.E. projects.
Sylvaine is Managing Director of SC Training & Consulting Sarl, a practice coaching banks, insurance companies and corporates on Financing and Risk management issues.
Also, Sylvaine Chubert is Professor of Finance at Dauphine University in Paris and has lectured in Structured Finance for Coface and Agence Française de Developpement. She holds a Master degree from Sciences Po in Paris and a Certificate of Management from the E.U.A University in San Francisco, USA.

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