Private Power Finance: Key Structuring Considerations
{"Image DocumentName": "Private Power Finance: Key Structuring Considerations", "Image ImageDescription": "Project Development Phase. Construction Phase. Operations Phase. Early stage risk capital for: Environmental Studies. Feasibility/Demand Studies. Consulting/Tendering Costs. Legal and Technical Fees. Often comes up to 10.0% of total project costs. Construction finance to take project to completion: Financing Mix: Debt/Equity typically 70/30. Normal Viability Metrics: Debt Service Coverage Ratios (DSCR) Project & Equity IRRs. Requires long term (>10 yrs), low interest rate loans. Equity funding usually required prior to debt availability. Early Stage Risk Capital: May be provided by: Private Funds. Developmental Grants. Private Sponsors. Government Grants. Vendor Risk Participation. This is a crucial stage in project financing as decisions here will determine project bankability. Could take up to 5 years from here to financial close. Equity Investment: Requires patient investors (public sector, specialized funds, operating companies, pension funds) Equipment contractors also typical anchor investors. IRRs typically in the 15.0% to 18.0% range. Strong sponsors critical to catalyze debt financing. Debt Financing: DSCRs of up to 1.5x - 2.0x may be required depending on position in value chain. EXIM and Multilateral financing typical. Debt Service Reserve Account (DSRA) typical. Interest During Construction (IDC), fees and expenses typically rolled-up into cost. 3.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}