This document discusses the solar future in Belgium and infrastructure investment opportunities related to solar power. It covers the following key points:
- DG Infra+ and DG Infra Yield are infrastructure investment funds totaling €250 million managed by GIMV and Dexia that invest in areas like renewable energy, transport, water and telecom.
- PV installations are capital intensive and not a core asset for most industrial companies, so they are often developed and financed through separate dedicated structures.
- Investing in PV installations involves various risks across development, operation and dismantling phases that must be carefully allocated and managed to achieve appropriate risk-adjusted returns for investors.
- The solar future in Belgium will depend on
Risks associated in related contracts within project financing in constructio...eSAT Journals
Abstract Lending loan for project financing exposes the lender of many risks involved in the related contracts within project financing. To safeguard themselves from these risks Lenders generally put in a lot of efforts to minimise the affect of these risks. We will discuss the scope and effectiveness of the efforts that help to protect the lenders to suffer from losses with the help of different related contracts and examples. Key Words: Contractors, project financing, related contracts, indemnity.
Sbi rooftop program, RESCO constructs, owns, operates and maintains the project,Financing Modes,Target Group
Solar Plant, Lease, Chemtrols Solar, jay.ranvir@chemtrolssolar.com
We are delighted to welcome you to the first edition of Systech
Insights in which we share our expertise and opinions on a range of topical issues.
Stephen Rayment and Mark Woodward-Smith
Group Managing Directors
A New Arrow for The Pension Practitioners Quiver: Pension Risk TransferJay Dinunzio
Webinar Presentation Slides
Gone are the days of group annuity contracts only being able to satisfy the plan termination objectives of a pension plan sponsor. Today, there are a wide variety of useful applications for guaranteed institutional annuity contract structures to provide an alternative to traditional fixed income investments. Are you or your pension clients:
•Struggling with cost and volatility issues surrounding a defined benefit pension plan?
•Considering a liability driven investment strategy that will de-risk the plan investment and allow for stable, predictable funding?
•Limited by fixed income funds that only allow for simple duration matching, and expose the plan to cash flow mismatch risks?
•Unaware of the variety of customized institutional insurance contract structures available?
•Lacking a fiduciary process for evaluating and monitoring the attractiveness of insured pension solutions?
Risks associated in related contracts within project financing in constructio...eSAT Journals
Abstract Lending loan for project financing exposes the lender of many risks involved in the related contracts within project financing. To safeguard themselves from these risks Lenders generally put in a lot of efforts to minimise the affect of these risks. We will discuss the scope and effectiveness of the efforts that help to protect the lenders to suffer from losses with the help of different related contracts and examples. Key Words: Contractors, project financing, related contracts, indemnity.
Sbi rooftop program, RESCO constructs, owns, operates and maintains the project,Financing Modes,Target Group
Solar Plant, Lease, Chemtrols Solar, jay.ranvir@chemtrolssolar.com
We are delighted to welcome you to the first edition of Systech
Insights in which we share our expertise and opinions on a range of topical issues.
Stephen Rayment and Mark Woodward-Smith
Group Managing Directors
A New Arrow for The Pension Practitioners Quiver: Pension Risk TransferJay Dinunzio
Webinar Presentation Slides
Gone are the days of group annuity contracts only being able to satisfy the plan termination objectives of a pension plan sponsor. Today, there are a wide variety of useful applications for guaranteed institutional annuity contract structures to provide an alternative to traditional fixed income investments. Are you or your pension clients:
•Struggling with cost and volatility issues surrounding a defined benefit pension plan?
•Considering a liability driven investment strategy that will de-risk the plan investment and allow for stable, predictable funding?
•Limited by fixed income funds that only allow for simple duration matching, and expose the plan to cash flow mismatch risks?
•Unaware of the variety of customized institutional insurance contract structures available?
•Lacking a fiduciary process for evaluating and monitoring the attractiveness of insured pension solutions?
10 Megawatt Solar Project Seeks Investor.
Land already available on a long lease.
Government authorisation is available.
Environmental Impact Assessment done but pending submission..
The Lord Howe Island Board (the Board) has engaged Jacobs as the Owner’s Engineer (OE) for the implementation of its Hybrid Renewable Energy Project (HREP) on the Island. The projects aims are to: x Reduce diesel consumption, which will help reduce future electricity tariff increases caused by fuel cost increases. x Reduce the cost of generation which will reduce the recurrent funding requirements from the NSW government.
The Board has obtained Australian Renewable Energy Agency (ARENA) and NSW Treasury funding to cover the project capital expenditure (CAPEX). The Board considered two options for the HREP. Option 11 encompasses installing wind turbines and solar PV while Option 22 involves installing only solar PV. Both options include the installation of a battery and control system. Option 1 provides the greatest diesel reduction and is preferred as it maximises the benefits of the project.
The location proposed for the installation of the wind turbines and solar PV is on the northern half of the island, north of the airport. The site, on a cleared section of Transit Hill, is elevated with north facing slopes which provides favourable characteristics for solar and wind. The site is also in close proximity to the island’s powerhouse.
Jacobs has undertaken this Technical Feasibility Study on behalf of the Board to review the technical feasibility of the two options before proceeding to the tender phase of the project. The study examines the optimal configuration, and sizing of the WTG’s, Solar PV and Battery based on potential variations in the capital cost and generation outputs of the WTG’s and Solar PV. The study does not consider alternative sources of generation such as options for wave power, etc as these have been previously examined by the Board and discounted (Powercorp, 2011).
2012 05 Severn Tidal Power Resource Bill Cooper, ABP merSevernEstuary
Bill Cooper - ABP MER
Severn Tidal Power Resource
Bill Cooper is Managing Director of ABP Marine Environmental Research. Bill has over 26 years of practical experience in coastal projects since he graduated from Swansea University where he obtained his first degree in Oceanography. Bill has previously worked at the Tidal Waters Unit of Welsh Water and for an engineering consultancy based in South Wales. Since 2004, Bill has contributed to a variety of marine renewable energy projects, ranging from development of standards and guidance, strategic scale studies for UK Government, to major infrastructure projects like the Severn Tidal Power schemes and also local developments such as the Swansea Bay Tidal lagoon.
This presentation aims to provide an objective overview of the Severn Tidal Power Resource, as a personal examination and without prejudice. An explanation is offered as to why the resource in the Severn is so unique in contrast to other UK estuaries and why some of these properties present issues of their own. The presentation highlights some of the implications of harvesting the resource and interest features that may be involved.
Course on Regulation and Sustainable Energy in Developing Countries - Session 9Leonardo ENERGY
Session 9 is devoted to Energy Services Companies (ESCOs). First, it introduces the Energy Performance Certificates concept and EPC contractual approaches. Then, it presents the need for measurement and verifications (M&V). It presents different ESCOs models:
the utility-based ESCOs with the cases of Croatia and Uruguay;
the Governement-based ESCO with the case of India;
the private sector ESCO with the case of China.
It concludes with the examples of institutional development schemes in Tunisia and Ivory Coast.
Operating Solar Fields – Lower Middle-Income Country (Single-B rated) - Chris...OECD Environment
BIAC-OECD Virtual Roundtable on mobilising private sector finance and investments for affordable and clean energy in developing countries, 26 October 2021
This power project finance primer draws upon the works on Esty, Finnerty, and Sawhney - some of the top financial engineers of our time. It also builds from my experience in the sector and follows a framework commonly used by infrastructure investors at large.
Private sector in infrastructure funding/financing models and role of institu...OECD Governance
Presentation made by Raffaele Della Croce, Financial Affairs Division & Dejan Makovsek, Investment Division, OECD, at the 9th annual network meeting of Senior Infrastructure & PPP Officials held at the OECD, Paris, on 1 March 2016
10 Megawatt Solar Project Seeks Investor.
Land already available on a long lease.
Government authorisation is available.
Environmental Impact Assessment done but pending submission..
The Lord Howe Island Board (the Board) has engaged Jacobs as the Owner’s Engineer (OE) for the implementation of its Hybrid Renewable Energy Project (HREP) on the Island. The projects aims are to: x Reduce diesel consumption, which will help reduce future electricity tariff increases caused by fuel cost increases. x Reduce the cost of generation which will reduce the recurrent funding requirements from the NSW government.
The Board has obtained Australian Renewable Energy Agency (ARENA) and NSW Treasury funding to cover the project capital expenditure (CAPEX). The Board considered two options for the HREP. Option 11 encompasses installing wind turbines and solar PV while Option 22 involves installing only solar PV. Both options include the installation of a battery and control system. Option 1 provides the greatest diesel reduction and is preferred as it maximises the benefits of the project.
The location proposed for the installation of the wind turbines and solar PV is on the northern half of the island, north of the airport. The site, on a cleared section of Transit Hill, is elevated with north facing slopes which provides favourable characteristics for solar and wind. The site is also in close proximity to the island’s powerhouse.
Jacobs has undertaken this Technical Feasibility Study on behalf of the Board to review the technical feasibility of the two options before proceeding to the tender phase of the project. The study examines the optimal configuration, and sizing of the WTG’s, Solar PV and Battery based on potential variations in the capital cost and generation outputs of the WTG’s and Solar PV. The study does not consider alternative sources of generation such as options for wave power, etc as these have been previously examined by the Board and discounted (Powercorp, 2011).
2012 05 Severn Tidal Power Resource Bill Cooper, ABP merSevernEstuary
Bill Cooper - ABP MER
Severn Tidal Power Resource
Bill Cooper is Managing Director of ABP Marine Environmental Research. Bill has over 26 years of practical experience in coastal projects since he graduated from Swansea University where he obtained his first degree in Oceanography. Bill has previously worked at the Tidal Waters Unit of Welsh Water and for an engineering consultancy based in South Wales. Since 2004, Bill has contributed to a variety of marine renewable energy projects, ranging from development of standards and guidance, strategic scale studies for UK Government, to major infrastructure projects like the Severn Tidal Power schemes and also local developments such as the Swansea Bay Tidal lagoon.
This presentation aims to provide an objective overview of the Severn Tidal Power Resource, as a personal examination and without prejudice. An explanation is offered as to why the resource in the Severn is so unique in contrast to other UK estuaries and why some of these properties present issues of their own. The presentation highlights some of the implications of harvesting the resource and interest features that may be involved.
Course on Regulation and Sustainable Energy in Developing Countries - Session 9Leonardo ENERGY
Session 9 is devoted to Energy Services Companies (ESCOs). First, it introduces the Energy Performance Certificates concept and EPC contractual approaches. Then, it presents the need for measurement and verifications (M&V). It presents different ESCOs models:
the utility-based ESCOs with the cases of Croatia and Uruguay;
the Governement-based ESCO with the case of India;
the private sector ESCO with the case of China.
It concludes with the examples of institutional development schemes in Tunisia and Ivory Coast.
Operating Solar Fields – Lower Middle-Income Country (Single-B rated) - Chris...OECD Environment
BIAC-OECD Virtual Roundtable on mobilising private sector finance and investments for affordable and clean energy in developing countries, 26 October 2021
This power project finance primer draws upon the works on Esty, Finnerty, and Sawhney - some of the top financial engineers of our time. It also builds from my experience in the sector and follows a framework commonly used by infrastructure investors at large.
Private sector in infrastructure funding/financing models and role of institu...OECD Governance
Presentation made by Raffaele Della Croce, Financial Affairs Division & Dejan Makovsek, Investment Division, OECD, at the 9th annual network meeting of Senior Infrastructure & PPP Officials held at the OECD, Paris, on 1 March 2016
EmberClear BAML Global Energy Conference 2012emberclear
Albert Lin, Chief Executive Officer of EmberClear, presented at the Bank of America Merrill Lynch 2012 Global Energy Conference on Tuesday November 13, 2012 at the Fontainebleau Hotel in Miami, FL.
The 2012 Global Energy Conference is an interactive and highly productive gathering of industry leaders and top institutional investors. Bank of America Merrill Lynch’s Energy Research team will host senior leaders from more than 80 companies from the US and abroad representing a cross-section of subsectors and investment opportunities.
For more information please visit www.emberclear.com
Identifying risk in infrastructure projects is essential for allocation and potential mitigation strategies. We highlight some of the key risks and consider how they may best be managed
1. The Solar Future in Belgium
Infrastructure Investor: DG Infra+ / DG Infra Yield
March 23, 2011
2. 2
DG Infra+ and DG Infra Yield
sponsored and managed by GIMV and Dexia
Infrastructure activities launched end 2007 through a joint-venture of GIMV and Dexia
2 dedicated and complimentary infrastructure investment funds with EUR 250m of capital
committed and available for investment
DG Infra+
DG Infra Yield
Team of 8 professionals, located in Antwerp and The Hague (at the premises of Gimv)
Capital raised from 3th party investors including insurance companies and pension funds
Investments across different target sectors:
Public Private Partnerships Waste
(Renewable) energy Water
Transport / Logistics Social infrastructure
Selective real estate Telecom / ICT
3. DG Infra+ and DG Infra Yield
Key terms and features
DG Infra+ DG Infra Yield
Investment Focus Infrastructure and selective real Infrastructure and selective real estate
estate
Geographical Predominantly Benelux Predominantly Benelux
Focus
Risk Profile Development and/or Limited exposure to development and
construction risk allowed construction risk (only when
subordinated or senior debt
investments)
Return Profile Focus on value creation and Focus on periodic cash distributions
capital gains
Financing solution Equity, Equity-linked debt Secondary equity, Subordinated debt,
Senior debt
Fund Size 135 million 116 million (first Closing)
Incorporation 2007 2011
Term 12 years 30 years
4. 4
PV Installations : who will invest ?
Not interesting for industrial companies
Capital intensive - often burden on financial structure
Not a core asset for industrial companies
Value destructive: return on asset often lower than capital cost of an industrial company
Project developers mostly prefer to set up a separate dedicated structure for the financing of
PV installations:
Focus on developing – prefer to free-up capital for the next project(s)
Often not capital intensive companies
Investment funds / Institutional (direct) investors
Subject to correct risk / return profile
Perception of the sector often important (e.g. renewable energy is hot)
5. 5
PV Installations : an easy investment ?
Different project phases: Main participants:
Development phase Client
Operational phase Project developer (PD)
End phase - dismantling EPC contractor (EPC)
O&M contractor (O&M)
Manufacturers of parts
Bank (or leasing company)
Investor
Each project phase has its specific risks:
Who is bearing a specific risk ?
How is the risk managed ?
Allocate the risk to the participant who can best manage that risk
Investors are not prepared to take some of the risks
6. 6
PV Installations : an easy investment ?
Main risks in the development phase … to be allocated to … … and managed through …
Stability of the roof Client Building right agreement
Insurance contract
Grid capacity Client Building right agreement
Building permit in place (land based) Client Building right agreement
Find appropriate financing PD / Client Building right agreement
Construction delays PD / EPC Building right agreement
EPC guarantee*
Quality and performance of installation PD / EPC Techn. DD / EPC guarantee
Quality of parts (PV module, inverter, …) Manufacturer Techn. DD / suppl. guarantee
Quality of monitoring and reporting PD / EPC Techn. DD / EPC Agreement
Damage (building or PV installation) Insurance comp. Insurance contracts
* remark: the value of a guarantee also depends on the strength of the guarantor
7. 7
PV Installations : an easy investment ?
Main risks in the operational phase … to be allocated to … … and managed through …
Performance of the PV Installation EPC / O&M Guarantee EPC / O&M
Availability of the PV Installation EPC / O&M Guarantee EPC / O&M
Interruption of parts (module, inverter, …) Manufacturer Supplier agreement
Roof renovation Client Building right agreement
Damages (building or PV installation) Insurance comp. Insurance contracts
Retroactive changes to regulation Client / Investor Building right agreement
Radiation Investor / Bank
Client bankruptcy Investor / Bank building right agreement
% of local use of electricity Investor / Bank Local PPA
Evolution of market electricity prices Investor / Bank Local / Excess PPA
Evolution of market interest rates Investor / Bank Hedging agreement
Delayed cash flows Investor / Bank Financing Agreement
Event of default in financing agreement Investor / Bank Financing Agreement
8. 8
PV Installations : an easy investment ?
Main risks in the dismantling phase … to be allocated to … … and managed through …
Ownership of the PV Installation PD / EPC / Client Building right agreement
Dismantling cost PD / EPC / Client Building right agreement
Conclusion
Investing in PV installations is not an easy and straight-forward exercise
Varying deal structures, risk allocations and definitions of risk management can have a large
impact on the returns for investors
9. 9
Return Requirements ?
The return requirement of the investor is not just a fixed rate, but will depend on:
Deal structure
Risk allocation and management
The strength of the guarantor related to a guarantee
Some projects can possibly not be financed
Extensive due diligence:
Technical due diligence (installation + PV modules)
Building right agreement
Insurance contracts
Local / excess PPA
EPC Agreement + EPC Contractor itself
Supplier agreement + Supplier itself
O&M Agreement
Financing and hedging agreement
10. 10
2011 and 2012 ?
The Solar Future in Belgium will definitely depend on the evolution of the following items:
Minimum guarantees on the green certificates
Market electricity prices
Price of the PV modules
Market interest rates
However, the Solar Future will also depend on how risks have been and will be allocated and
managed. If not, this could have detrimental consequences:
For the client:
Development phase: delayed PV installation at less favorable conditions
Operational phase: less local electricity and / or less rental fees
For the investors / banks: lower returns or even write-offs
And in the end also for the solar sector itself as it would become more difficult to get
new clients and investors.
Hence, the solar sector itself is to a certain extent also responsible for its own future.