1 DAY MASTERCLASS

RENEWABLE ENERGY
PROJECT FINANCE
(online course)

Comprehensive training for the big picture

of renewable energy modelling

Understand the Funding requirements over the life cycle of a

renewable energy project

Learn how to balance the interests of ALL participants

Take decisions on behalf of debt and equity providers

Register now: visit www.5Training.co.uk or call +44 (0) 208 638 5753
YOUR TRAINER
Mr. Joachim Baumgaertner is a
specialist management consultant
in the renewable energy sector,
advising technology start-ups, growth
companies, financial institutions and strategy consultants on
a broad range of issues across the whole clean energy value
chain, including complementary areas of business planning,
technology strategy, financing and carbon management.
Joachim is involved in the project development of utility-scale
solar power, solar greenhouses and
waste-to-energy plants worldwide, including Zimbabwe,
South Africa, Ghana, Puerto Rico and India.
He has a Masters in Electrical Engineering from the University
of Stuttgart. Joachim has conducted research into off-grid
hybrid renewable energy systems with solar photovoltaics,
and wind turbines at the Centre for Renewable Energy in
Loughborough where he was awarded an MPhil.
He gained an MBA with Distinction from the London Business
School with particular focus on finance and entrepreneurship.
During the past decades the power market has
experienced waves of ups and downs. Regulatory
uncertainties, liberalisation policies and volatile oil &
gas prices have made investors and debt providers
very wary.
This course on renewable energy modelling and
financing presents the tools to analyse and structure
renewable energy projects and to incorporate and
measure inherent risks required to navigate any
renewable energy project. This enables a wide
variety of people to benefit such as:
Insurance
Energy
equipment
providers
Energy Asset
Register now: visit www.5Training.co.uk or call +44 (0) 208 638 5753
TRUE BUSINESS ADVANTAGE
• Understand the funding requirements over the life cycle of
a renewable energy project and types of funding
instruments available.
• Learn how to balance the interests of ALL Participants
• The Lender’s criteria
• Equity participant’s criteria
• Offtaker’s criteria
• Take decisions on behalf of debt and equity providers to
invest in or lend to the project based on financial analysis
HOW DOES IT WORK?
All Materials and slides will be shared electronically
Course Timings: 9am – 12pm and 1pm – 4pm UK GMT.
Timings can be adjusted to suit your time zone.
Course places will be limited to ensure learning quality
About 5Training
We deliver Clean Technology Training courses.
Headquartered in London and with top
professionals based globally, 5Training brings
clean technology training courses to professionals.
We help new entrants, senior managers,
professional advisers, industry suppliers, and
regulatory officials bridge knowledge gaps and
attain precious industry insights.
We are on the pulse of Cleantech training course
content that will help you and your team
dramatically boost performance and exceed
targets.
IN-HOUSE
If you have a team of
5 people or more, our
experts will tailor and
deliver the course to
your requirements.
Summary Agenda
Part I Introduction
• Characteristics of renewable energy projects: technical,
commercial and social
• Touchpoints between technology and finance
• Cash-flow analysis using a financial model:
objectives, basic principles, key metrics (case
study: 50MW solar photovoltaic power plant)
Part II Financing Instruments
• Basic funding structures: all-equity, on-balance sheet,
non-recourse
• Project finance: motivation, characteristics, why and when
to choose and not to choose project finance
• The toolbox for funding: financing instruments:
• Grant Funding
• Debt Funding: loan drawdown, repayment and debt
optimization, covenants, fees, tax shield
• Equity: Ordinary vs Mezzanine shares
• Investment tax credits
Register now: visit www.5Training.co.uk or call +44 (0) 208 638 5753
Part III Risk Identification and
Management
• Objectives of risk management
• Two measures, 7 generic strategies and 17 risks:
measuring risk and devising risk strategy
• Risks include amongst others engineering, completion,
infrastructure, operational, environmental, political, credit,
interest rate, market and modelling risk.
Part IV Deal Structuring
• Dear structuring: the art of balancing all participants’
requirements: lending decisions, investment decisions and
buyer’s criteria
• Valuation of embedded carbon project (selling carbon
credits)
• Debt re-financing to optimize debt after commercial
operation date
• Secondary equity sale as exit strategy for early investors
• Building portfolios: sequencing and portfolio building
• Taxation overview

Detailed Agenda
Part I Introduction
Characteristics of Renewable Energy Projects
• Technical: short-term fluctuations, seasonal variations,
annual variability, area usage, conversion efficiency,
capacity factor, spinning reserve, dispatch mode, project
sizes
• Commercial: capital intensity, capital recovery factor
and capital charge, capital raise
• Social and Political: Incentives for renewable energy
projects, regulated tariff structures, secondary revenue
streams from sale of environmental attributes. The
principles behind carbon credits.
The Unlevered Project
• Project context: grid-connected, off-grid, mini-grid and
single-buyer vs de-regulated market
• The touchpoints between technology and the financial
model: energy production, annual production profile,
asset lifetime, dispatch mode, seasonality – include a
roundup of technologies
• Cash flow analysis: free cash flows, Internal rate of
return (“Project IRR”), net present value, levelized cost
of energy, payback period
Case Study 1 – Utility-solar 50MW
Examining a cash flow model in Excel for a solar farm
project.
Part II Financing Instruments
and Sources
Overview
Funding requirements over the life cycle of a renewable
energy project and types of funding instruments available.
Grant Funding
Cash vs in-kind benefits
Debt Funding
Motivation for debt funding
Basic Funding Structures
• All-equity
• On-balance sheet debt financing
Register now: visit www.5Training.co.uk or call +44 (0) 208 638 5753
• Non-recourse financing
Excursion: Project Finance
• Comparison between project finance and on-balance sheet
finance
• Motivation for project finance for private investors
and governments
• Why not to choose project finance?
• Characteristics of a project finance deal
• Trends in project finance
Debt Maths
• Loan parameters and covenants
• Interest calculations
• Draw-downs: equity-first, equity-last, pro-rata – calculation
of capitalized interest and commitment fee
Case Study 1 – Continued
Calculating capitalized interest and commitment fee during
construction (IDC) for a given cash flow schedule applying
pro-rata draw-down method.
• Loan repayment: debt service cover ratio as a measure
of the project’s ability to repay the debt.
• Repayment schedules: equal principal, amortizing
with / without increasing / decreasing debt service
payments, cash sweep, optimized repayments
schedules thru debt sculpting
Case Study 1 – Continued
Debt sculpting and debt optimization.
• Other credit ratios: debt service cover ratio, minimum debt
service cover ratio, loan-life ratio, residual, liquidity.
• Tax shield
• Fees
• Debt service reserve account: purpose, funding
• Principal moratorium
Bonds
• Debt service reserve account: purpose, funding
• When to use bonds and when not
• Process of issuing a bond
• Project bond vs private placement
Equity Instruments
 • Modeling risk
Overview of equity instruments and the structure of claims:
• Free cash flow to equity
• Ordinary vs preferred (“mezzanine”) shares Part IV Deal Structuring:
• Shareholder loan Balancing the Interests of All
Leasing Participants
• Principle of leasing, motivation, calculating annual lease
Equity participants’ criteria
payment
• Financial criteria: net present value, equity return, payback
period, hurdle rate
Islamic Finance
• Principles • What is the right discount rate? Estimation of risk and cost
of capital taking into account an implemented risk strategy
• Debt-like structures
• Non-financial criteria
• Equity-like structures

Investment Tax Credit Case Study 1 – Continued

Evaluating equity returns and debt service cover ratio on a
levered deal.
Part III Risk Identification
Lender’s criteria
and Management • Non-recourse loan: debt service cover ratios, life-loan ratio
Objectives of risk management and the risk management
• On-balance sheet financing: liquidity and other
process
credit ratios
The 2 Measures • Criteria for “bankability”
• Measuring risks: probability and severity
Offtaker’s criteria
The 7 Generic Strategies • Savings in comparison to grid price or fuel
• The 7 generic strategies to deal with individual risks:
accept, trigger, finance, allocate, mitigate, hedge, avoid • In off-grid / weak grid applications: autonomy, probability
of loss of load
The 17 risks • Levelized cost of energy as a measure for policy makers
For each of the risks: description, sources of the risk, ways to
measure and applicable strategies Case Study 3 – Roof-top solar for
• Engineering risk industrial client
• Completion risk Assessment of the feasibility of a solar energy system for an
industrial client that is currently supplied by the grid via a
• Infrastructure risk 3-tiered pricing method with particularly high prices during
• Operational risk peak hours

• Environmental risk
More Debt Structuring and Sources
• Force majeure
• Door-to-door vs separate construction loan
• Political risk
• Funding from export credit agencies and re-financing after
• Credit risk COD
• Foreign exchange risk
• Co-financing: debt from commercial and development
• Equity/sponsor risk banks
• Liquidity risk • Loan syndication
• Syndication and inter-creditor risk • Bonds and private placements
• Market risk • Commodity-based lending
• Renewable supply (“traffic risk”) risk: calculation and
application of exceedance probabilities Re-financing
• Legal risk • Mechanics, reasons, costs and benefits of re-financing after
Register now: visit www.5Training.co.uk or call +44 (0) 208 638 5753
 COD

Secondary Equity Sale

• Exit strategy: benefits of selling shares after COD,
calculating the sales price

Other Strategies to Improve a Deal

• Embedded carbon credit project
• Portfolio building and sequencing

Case Study 3 – Competitive tender in

Dubai
Illustrating the impact of portfolio building on the overall
return or bid price.

• Equity participants providing services to the project

• Tax optimization (overview)

Register now: visit www.5Training.co.uk or call +44 (0) 208 638 5753