Quantitative Valuation of Renewable Energy Projects
摘要
In renewable energy infrastructure, the capital required to fund the project is so large that it requires contributions from investors, lenders, and often a syndication of lenders. Each of these parties has a different risk-reward expectation profile. Subsequently, each party will have its own metrics to measure its return. For instance, a lender would look at the capacity of the project to generate enough revenues to pay the operating costs, taxes but most important to service the debt and associated interest (DSCR, LLCR and PLCR, Debt to Equity ratio). While an equity provider would be looking at the equity IRR, the NPV, and how this value would increase if he or she could leverage more debt, extend the loan term or have a more convenient repayment schedule. The sponsor, interested in obtaining an offtake agreement in a competitive auction for instance, would be interested in the parameters that could reduce the LCoE, or in general at how to create more value for the project. Understanding this aspect of the financial model, namely the metrics, helps get a full and sharp picture of the project's financial solidity and enables toggling with the different factors to reach a common agreement with all parties in terms of returns and minimum conditions of the lenders.