Financing the energy transition

See more French version

Financial structures, Risk analysis, BP modelling elements, Market players and trends

Course objectives

By the end of the course you’ll be able to:

Propose financing solutions for energy transition projects: Non-recourse project debt, Public aid programs, Export Credit Agency Credits, Green bonds, Junior & mezzanine debt, etc.
Understand RE project cash-flow models (solar, wind and storage) and determine the debt and yield capacity of an energy transition project.
Know the main metrics (IRR, AIIRR, LCOE and LCOS, etc.) and the main financial analysis ratios of these projects: DSCR, LLCR, PLCR and their use in a "bankability" perspective
Identify the main debt and equity financing providers: commercial banks, dedicated investment funds (biofuels, hydrogen, etc.), Socially Responsible Investment (SRI) funds, Venture Capital Funds, Export Credit Agencies (ACE), French and European Union support plans and multilateral banks (such as the EIB, World Bank, etc.)
Navigate within the European Union Sustainable Investment Taxonomy and sustainable investment funds labelled Art 8 & Art. 9
Identify the main (financial and non-financial) risks from the point of view of the banks financing these projects and select related mitigation instruments. Know how to make a project "bankable".

Benefits for you

Interactive, practical and multi-channel teaching including:

Case studies derived from real transactions in your sector, carried out in small groups and debriefed by your coach.
Quizzes to follow your learning curve
Discussions between participants on their market practice
Videos and podcasts on recent market developments

Please note: To guarantee each participant a good educational return on this training, we recommend groups of a maximum of ten participants.

Language & Prerequisites

Depending on the audience, this seminar can be conducted in French or English.

Please note: This « Financing the energy transition » program is aimed at employees who already have a foundation in Finance or, in the opposite case, who have already followed the « Financing of renewable energy projects » training.

Duration

Two days.
Dates to be determined according to your schedules. Please let us know if there are any slots that would be better suited to your team.

Location

To be determined at your convenience: in house in your premises or at an external venue of your (or our) choice.

For whom?

This program will be of particular added value for engineering and/or banking profiles but also for their advisors, exercising functions of:

Project managers
Project Tendering managers – Cost managers
Business developers
Financial managers
Banking analysts
Country managers
Strategy managers
Risk managers
Management controllers
Related professions: Contract lawyers, Compliance officers, etc.

Course program

Day 1

Market trends, financial engineering, financing players

Introduction: The evolution of the sustainable infrastructure and transition energy markets. State of the financial markets, what impact do interest rates have on energy transition projects?

Start-up quiz to help you distinguish between SPV project financing, Corporate financing and asset financing

A. Brief reminder of the fundamentals of Project Financing and in particular non-recourse debt packages financing either BOT concessions or wind/solar/storage projects located on land under emphyteutic leases.

B. The main project players and their role in risk management: industrial sponsors vs. purely financial sponsors, State, strategic equipment suppliers, EPC engineering companies, offtaker, operating and maintenance (O&M) company, consultants, etc.

Case study: Financial and contractual structuring of a recently developed solar and wind project with associated storage capacity (BESS)

C. The importance of the contractualization method around the SPV project. Special focus on “Merchant tariffs” (non-subsidized) and the emergence of “Corporate PPAs” in renewable energies with certificates of origin and “virtual PPAs”

Case study: analysis of a recent Corporate PPA transaction in France. Update on the BPI guarantee scheme. Visibility on the CPPAs of North American Tech

D. The different debt providers: private commercial banks – providing Debt with or without recourse, guarantees & SBLC’s, syndication and underwriting services, etc.- versus state supported – Multilateral Development Banks and Export Credit Agencies

E. The new players in Equity financing: Private Equity investment funds, Infrastructure & Energy bond-side funds. The concept of subordinated debt: Senior, Junior, Mezzanine.

Case study on two European investment funds positioned on energy transition investments and their investment strategies on hydrogen, CCUS, offshore wind, etc.

F. Banking due diligence:

How to make a project « bankable »? Role of advisors (Tech, Tax, ESG, Insurance, Legal, etc.) in the risk audit process.

Presentation of a risk matrix as a « toolbox » in preparation for financing and developing the project’s business model.

Day 2

Financing solutions for energy transition projects

Getting started quiz to review the fundamentals covered in day 1, including Anglo-Saxon project finance terminology

A. Construction project loans in non-recourse bank debt.

Project modelling workshop. CAPEX, OPEX, IRR, WACC scenarios. Calculation of the main ratios and the project’s debt capacity.

Case study: the « Bank » model for financing a renewable energy project. Presentation of the financial model architecture. How banks parameterize debt based on the DSCR and CFADS.

DSCR workshop and debt calibration. Sensitivity parameters and their use by banks in their project risk analysis based on technology maturity, market risk (fixed price versus “merchant”), exposure to political risk or construction risks, etc.

B. Project bond financing and Green Bonds

What is a bond and how does a bond fundraising work on the markets? Presentation of the Green Bonds Principles (GBP) and global bond volume of this rapidly growing market.

The concept of “green labeling” of investment funds. The French ISR label and other major European green labels. What are the advantages for bond issuers and their investors?

Case study: a Green bond issue by a European player in the energy transition

C. Public plans to support the energy transition in Europe and France:

Hydrogen Plan, France 2030 Recovery plan, ADEME fund, IPCEI H2 call for tenders, IRA in the United States, Net Zero Industry Act, etc.

Spotlight on the European Union’s « Green Deal » and on the financial interventions of the European Investment Bank (EIB) in support of sustainable energy projects.

Introduction to the new European Taxonomy on sustainable investments.

Case study: an « Article 9 » investment fund funded by the EIB

D. Financing under the cover of Export Credit Agencies: buyer credits – « ECA Loans ». Or how to finance suppliers of equipment and engineering services for Export at preferential rates?

E. How to finance immature technologies?

Review of these technologies and the corresponding financial models: Carbon Capture & Storage (CCS), SAF, Green Hydrogen, stand-alone or co-location energy storage projects (solar + wind + storage) with calculation of the Levelized Cost of Storage (LCOS)

Impact on manufacturers of the current evolution of CO2 prices. Illustration of a quota trading transaction between two manufacturers. Green industry financing law in France

Summary case study: Structuring a CCS or Green steel project. Work in small groups on the financing solutions to be provided.

Conclusion on the market outlook for the coming year

Evaluation

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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