Objective

• To establish that the preferred power and capture element of the project is sound and that it is a ‘bankable’ proposition for investment
• Finalising the funding arrangements with investment partners and government / NGO’s where applicable to a point where they are ready for execution following FID

Major Deliverables

• Fully termed funding agreements with investment partners
• Fully termed funding agreements with debt providers
• Fully termed funding agreements with external sponsors
• Completed financial, insurance and technical due diligence exercise
• Audited financial model
• Credit committee and board approvals

Tasks

Specific tasks include the following:

• Prepare the necessary documentation to allow funding due diligence activities to be carried out by potential funders and investors in an efficient and effective manner.   This should set out at least the following information in relation to the preferred power and capture element:
  • Project programme
  • Project costs data book
  • Project risk register
  • Storage site suitability / characterisation
  • Financial model
  • Sensitivity analysis
  • Status of commercial negotiations
  • Outstanding issues
  • Regulatory risks
  • Supply chain preparedness
  • Insurance due diligence report
  • Technical due diligence report
• Support the financial due diligence process through making available key members of the project team
• In conjunction with the commercial team and using the funding plan, negotiate the terms and conditions for the funding agreements for the preferred power and capture option.  These will be based on the heads of terms / principles agreed during the ‘Evaluate’ stage of the project and will set out provisions for at least the following:
  • Investment timing
  • Investment amounts
  • Conditions precedent on investment
  • Risk sharing provisions
  • Exit arrangements
  • Control / voting rights
  • Performance conditions
  • Levels of return
• In conjunction with the commercial team and using the funding plan, negotiate the terms and conditions for the funding agreements with the funding organisations (Governments / NGOs etc).  These will be based on the heads of terms / principles agreed during the ‘Evaluate’ stage of the project and will set out provisions for at least the following:
  • Value Delivery
  • Milestones / Deliverables
  • Funding timing
  • Funding amounts
  • Conditions precedent on investment
  • ‘Debt Cover’ thresholds
  • Risk sharing provisions
  • Exit arrangements
  • Performance conditions
  • Intellectual Property Rights
  • Knowledge Transfer
• Confirm the committed funds – setting out at least the following information:
  • Amount of funding
  • Source of funding
  • Funding entity and its financial capacity
  • Type of funding (Debt / Loan / Working Capital / Equity / Bonds / )
  • Funding interest rate
  • ‘Debt Cover’ thresholds
  • Draw down profile
  • Key dates in provision of funds
  • Repayment profile
  • Repayment conditions / covenants
  • Security requirements
  • Performance obligations
  • Termination provisions
• Define and quantify the risks associated with the funding agreements and the effect that the agreed risk sharing has on the preferred power and capture option of the project, which risks are involved and how this evidences value for money for the power and capture element of the project
• Determine whether there is a residual funding ‘gap’, its size and update the funding plan to identify how this will be addressed within the timescales for the delivery of the power and capture element

Examples

Key Personnel

• Project Manager
• Commercial work-stream lead
• Cost estimation work-stream lead
• Finance work-stream lead