Course WE3-01XL: Wind Farm Financing - extended

[with exercises and field trip]

The seminar covers financing small and large wind-energy projects - from cost structures to risk assessment. Lectures are supplemented by demonstrations and practical exercises in RENAC’s training center in Berlin.

Content

• The seminar provides detailed knowledge about wind farm financing. It covers cost structures of wind farms, contracts, revenues, due diligence, cash flow and risk analysis, financing instruments and bankability of projects.
• Practical exercises complement the theoretical material to ensure an optimal learning outcome Exercises shall deepen participants’ knowledge.
• They shall make course participants well familiar with challenges in putting knowledge to practical use. The cover wind power assessment, drafting case studies for cash flow analysis and acquisition of equity and debts.

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Purpose

• At the end of the five-day course you should have a fundamental understanding of financing wind farms.
• You should attain theoretical and practical skills required for cash flow and risk analysis, acquisition of equity and debts as well as understanding of the due diligence of complex wind farm projects and the negotiation of contractual agreements with banks and other capital providers.
• Exercises shall deepen participants’ knowledge. They shall make course participants well familiar with challenges in putting knowledge to practical use.

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Target group

• This course is aimed at developers, lenders and other professionals who wish to extend their knowledge on wind energy financing and the due diligence process.

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Requirements

• Basic understanding of physics of wind energy is required.

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Advantages

• Reduction of both timelines and costs of financing
• Knowledge on acquisition of equity and debts
• Knowledge about wind farm financing that can be readily put into practical use
• Rapid learning of theory and practice in a single course
• Learn in small groups (less than 16 persons)
• Time for answering your questions
• Tutors with current business experience teach you about the prevailing technology and point out latest trends

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Program

Introduction to wind farm finance

• Global trends
• Wind value chain and funding optionsThree main debt financing alternatives
• Characteristics of the Project Finance structure and motivation for its use

Introduction to Wind Energy

• Current status and future trends of wind energy

Wind resource assessment in feasibility studies

• Methodology, standards, physics, input parameter
• Standards, quality of a  bankable  wind study
• Checklist for call for tender
• Deriving the mean value and probabilities of exceedance
• Interpretation of results

Cost structures of wind farms, investment and operation

• Planning, licensing
• Construction
• Operations, maintenance, insurance
• Land rights, decommissioning
• Repowering
• Components of a wind farm

Contractual Documentation

• Overview of contracts
• Construction/turbine supply contracts incl. standards, responsibilities, guarantees, insurance
• Operations and maintenance agreements incl. standards, responsibilities, guarantees, insurance
• Power purchasing agreement
• Land lease agreements
• Commercial services agreement
• Credit agreement (incl. term sheet,  credit and related collateral documentation
• Shareholder agreement

Revenues

• Overview of support mechanisms
•  Feed in tariffs
• Green certificates, quota
• Production / investment tax credit
• Wind power in the energy market
• CO₂ certificate generation (CDM, JI)

Cash flow Analysis

• Methodology
• Parameters
• Scenarios, sensitivity analysis
• Risk analysis using Monte-Carlo
• Valuation of the project, NPV and IRR
• Leveraging the project, banking case,
• Bank financial ratios (DSCR, LLCR etc.)

Due Diligence

• Investor’s / bank’s  due diligence approach
• Different consultants, scope of work and tender
• Dataroom

Financing Instruments

• Equity (institutional vs. retail )
• Mezzanine
• Debt (bank loans vs. bonds)
• Portfolio financing
• Grants and funding from bi- and multilaterals

The Information Memorandum (IM)

• Purpose of the IM
• Structure and contents
• Marketing and distribution aspects

Risk Identification, Allocation and Mitigation

• Operational, regulatory and market risk
• Wind finance cross border risk (currency-related risk, political risk, change of law risk etc.)
• Wind finance commercial risk (construction and operations period) and risk mitigation

Business plan preparation / cash flow  and risk analysis and project valuation

• Methodology and use of MS-Excel
• Combining input parameters into an   Excel - business plan

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Excersise

Training / Case study in groups

• Costing
• Cash flow and valuation
• Sensitivity analysis

Training / acquisition of equity and debts

• Preparing the acquisition of equity and debt tenders /Drafting of an Information Memorandum
• Comparing financing term sheets

Presentation of working group results and review of results

• Presentation of Case studies
• Acquisition of equity and debts

Wind Power

• Wind resource assessment
• Wind energy laboratory (power curve measurement, pitch of blade angle)
• Energy yield calculation of different wind turbines

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Speakers

Albrecht Tiedemann, RENAC

Gerard Reid, Ardour Capital

Alexander Boensch

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Soft- and hardware

• Small wind turbines for laboratories (12 cm rotor diameter)
• Excel (for case study)

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Further information and contact

For detailed information about course content, please contact the project director:

• Mr. Albrecht Tiedemann
• e-mail: info[at]renac.de
• phone: +49 (0) 30-526 895 871

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