There is no second chance to make a first impression...
During the past three years as a mediator between asset owners and investors in the renewable energy sector, Green Dealflow witnessed a high level of process inefficiency and miscommunication that was caused by unsubstantial project teasers. We realised something had to change and asked ourselves and some investors in our network:
- What does a solid project teaser looks like?
- Which information is relevant to investors?
- How should a teaser be structured to facilitate transactions?
Based on our extensive knowledge in financing of renewable energy projects, we designed new teasers for both Wind and Solar projects which are now available on our platform. The aim of the new structure is to make it simple for asset owners to provide investors with relevant information about their project. A convincing project teaser often represents, just like an appealing business card, the starting point of fruitful business partnerships. If the information is complete, credible and up-to-date, the teaser will allow quick and efficient match-making between the asset owner and suitable investors.
For Wind, we identified 10 crucial elements and developed a template for a solid teaser which has the potential to attract keen investors.
Based on our findings, the new template is divided into 10 sections (Figure 1).
Figure 1 - The 10 crucial elements of a solid wind project teaser
The teaser starts off with an overview of the project development. The purpose of this first section is to introduce the investor to the project development process, from the inception of the idea to the start of commercial operation. The project development process is contingent upon many external factors. However, at Green Dealflow, we consider the project development process as certain activities that need to be completed and which can broadly be organised in the following 8 stages.
- Site identification and concept development.
- Feasibility study.
- Regulatory and legal.
- Contracts.
- Equipment.
- Financing and Economics.
- EPC and O&M.
- Construction and COD.
The first three parts of Section I are relevant to owners of assets in the Development and Operation stage. The first consists of Site Identification and Concept Development and considers local support, grid access, zoning and the overall suitability of the site. The second part of Section I conducts a Feasibility Study which assess the proposed design, technology, cost, electrical interconnection, power purchaser load profile, CAPEX, grid connection and possible mitigation factors (e.g. forestation, noise abatement, etc.) as well as the prevailing country standards for maintenance scheduling, overhauls and spares. The third part of Section I takes into consideration Regulatory and Legal aspects such as the right to develop, land use and site control, permitting, environmental compliance and impact, the implementation agreement and the risk management strategy.
The Equipment and the Financing/Economics concern owners of Ready-to-Build and Operation assets. Both parts request the asset owner to fill in dates of the occurrence of specific events such as the finalisation of wind turbines, the consideration of suitability for remote service or of sensitivity to heat and moisture as well as the development and sourcing of budget and funds, the elaboration of the financial structure and the consideration of exit scenarios such as disposition refinancing or transfer.
Engineering, Procurement, and Construction (EPC) & Operation and Maintenance (O&M) and Construction and COD represent the last two parts of Section I and are only addressed to projects that reached the Turn-Key or Operation stage.
Section II gives an overview of the Gross and Net Production. Here, the asset owner should aim to provide the investor with an estimated but realistic amount of energy outcome over the life time of the wind asset. It is crucial to be precise and provide as much information as possible.
Section III investigates the Permitting, Licensing, and Environmental and Social Considerations, in particular if the necessary assessments have been carried out and if all permit applications are completed. The asset owner has to ensure the compatibility with the national grid regulations and that he obtained the land lease agreement as well as the electricity generation license.
In Section IV, the commercial viability of a wind turbine project is determined through a Financial Analysis that takes into account the expected costs, investment requirements, O&M costs, and revenues.
Section V explores Partnership Roles and Responsibilities and allocates different tasks to the developer or the investor – from development funding to EPC.
In Section VI and VII the asset owner is asked to attach an estimated Cash Flow Statement and a Forecasted Profit and Loss Account to provide interested investors with detailed information on the profitability of the undertake.
The Pre-Requisite for Investment in Section VIII investigates both the object of purchase (e.g. development rights, EPC, O&M contracts, etc.) and the cost structure.
Section IX of the template is reserved for contributions about the asset owner’s company and previous experience. Any information which contributes to the credibility of the project (e.g. senior management, track record) is valuable here.
The last section allows the asset owner to include specific geographical characteristics of the asset into the teaser such as locations maps, wind maps, electrical interconnection diagrams, substation diagrams etc.
The first impression is crucial, hence it is important to have a high-quality teaser for a project as investors use it to determine whether they will consider investing or not.
Green Dealflow’s new teaser templates aim to support asset owners to provide investors with relevant and well-structured information at any time. We hope this will result in less redundant communication, increased transaction efficiency, and give rise to more fruitful business relationships in the renewable energy sector.
You can access the new teaser templates after you logged in under >My Account >Teaser Templates or provided you are already logged in by clicking here. If you are not a member yet, create a free account here.
