Managing the Risk of Financing Renewable Energy Projects

IntroductionFor Wind, Small Hydro and Solar projects, debt providers need to:

This Video will explain ORTECH’s approach!

Manage risks of the

projects they finance

Ensure the projects are constructed

correctly

Commissioned to acceptable

standards

Three Phased Approach

Phase 3:Start-up, Testing, Commissioning & Post-Commissioning Monitoring

Phase 2:Construction Monitoring

Phase 1: Technical Due Diligence

Approach: Document Review of project from Lifecycle Point of View

Phase 1: Technical Due Diligence

Development OperationConstruction

• Adequacy of Land Area,• Resource (Audit for

reasonableness unless otherwise required by Debt Provider),

• Grid Connection,• Permitting Status,• Domestic Content issues,• Constructability,• Equipment Suitability,

and• Development Risk

Summary.

• Scope,• Schedule,• Capital Cost, and• Project

Management.

• Energy output projections,

• Revenue projections,• Operating cost

projections, and• Net revenue projections

including reasonableness of operational cost and projections the owner’s ability to meet debt service coverage ratios.

Approach: Review the Engineer, Procure, Construction (“EPC”) contracts progress

Phase 2:Construction Monitoring

Attend Kickoff Meeting

Prepare Lender’s Engineer’s Report

Review Change Order

Attend ProgressMeetings

• Reviewed by ORTECH to ensure that the changes are in line with the overall project strategy

• Review and approve any draw requests.

• Compare actual verses contracted budgets to ensure the project is proceeding at a proper pace.

• ORTECH will conduct this review monthly and issue reports showing detailed progress

• Assessment of project advancement including:

• Design: Conformity of final design with the milestone schedules.

• Procurement:

Procurement contracts’ overall progress.

• Construction: Attend major inspections, tests or the start of important work phases.

The following will be determined: • responsibilities of

each party, • working

arrangements, • communications, • documentation

requirements, and • Reporting

certification and payment procedures.

Phase 3:Start-up, Testing, Commissioning & Post-Commissioning Monitoring

Verify Project Completion

Submit Letter Report(s) to Debt Provider

Review Contractor’s Test Reports

Review Performance Testing Procedures and Sites

Review Performance Testing

• Review all testing procedures for the project and provide commentary.

• Review all testing performed for project and provide commentary.

• Review the test reports prepared by the EPC vendors

• Prepare a letter report(s) covering planned execution of the start-up and pre-commissioning programs.

• Monitor and verify punch list items have been completed

If you need Technical Due Diligence or Lenders Engineering Services, please contact ORTECH

info@ortech.ca905 822 4120 x 680