Special Purpose Vehicle (SPV) Formation:

We established a separate legal entity, the Special Purpose Vehicle (SPV), to develop, own, and operate the project. The SPV acted as a ring-fenced entity, limiting risks to project stakeholders and safeguarding their interests.

Limited Recourse Financing:

We carefully managed reliance on limited recourse financing, ensuring that lenders had a claim solely on project assets and cash flows, rather than the general assets of the project sponsors. This strategy effectively mitigated risks for project sponsors.

Risk Allocation:

We conducted a comprehensive assessment of risks and allocated them among project stakeholders. This involved identifying and managing construction, operational, market, regulatory, and financial risks to protect the interests of lenders and investors.

Project Life Cycle Management:

Our project finance approach covered the entire project life cycle, from initial development and construction to operations and eventual refinancing or sale. This comprehensive approach ensured effective financial management at every stage.

Financial Structuring:

We designed a financial structure that optimized the capital stack by combining various funding sources such as debt, equity, grants, and guarantees. This structure aimed to strike a balance between risk and return for all project participants.

Due Diligence:

Rigorous due diligence was conducted to assess the project’s feasibility, viability, and associated risks. Technical, environmental, legal, and financial assessments were carried out to provide a comprehensive understanding of the project’s potential.

Long-Term Contract Support:

We facilitated negotiations and establishment of long-term contracts, such as power purchase agreements or off-take agreements. These contracts ensured revenue streams for the project and provided lenders with revenue visibility.

Network of Banks and Investors:

We leveraged our extensive network of local and international banks, private equity firms, and angel investors to raise the required financing for the project. A balanced 70:30 debt-equity financing structure was achieved, taking into account existing economic conditions.

Successful Implementation:

Through careful structuring, evaluation, and risk mitigation, we ensured the financial viability of the geothermal project. The project reached financial close within 24 months, considering market conditions, and is currently undergoing construction and development.

Conclusion:

Our expertise in project finance structuring enabled us to successfully evaluate and structure a 35 MW geothermal power project. By establishing a robust financial framework, managing risks, and attracting investment, we set the project on a path towards successful implementation.