Finance & Contract Analysis for Independent Power Projects (IPPs)

Learning Outcomes:

• Understand the objectives, theory, public policy and nuances of risk allocation between investor and off-taker for availability, heat rate, commissioning delay, operating costs, fuel prices, construction expenditures and capacity factor
• Learn the importance of debt structuring in measuring project risk and measuring project value and the effect of different financing structures on PPA bidding strategies
• Create flexible and transparent financial models of independent power projects that incorporate availability risk; heat rate risk, operating cost risks, financing structure, tax treatments, alternative pricing policies and other factors
• Prepare economic analysis that evaluates trade-offs between penalty provisions and PPA costs such as increasing availability penalty relative to required operation and maintenance costs
• Measure and evaluate changes in the risk of projects over different stages of the project and how equity returns and asset value change if purchases and sales occur at different phases of a project's life
• Learn practical tools to analyse details of power projects including efficient ways to work with supply and demand data, create flexible scenario and sensitivity analysis to evaluate efficiency and availability risk, construction risk, O&M risk and debt structuring, and develop techniques to resolve circular references related to funding debt and sculpting debt without copy and paste macros
• Work through implementation of risk allocation in PPA tariff design and evaluation of off-taker risk and off-taker financial analysis