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Made up of 25+ papers, this Guide is dedicated to different aspects of the development, funding, procurement, contracting, delivery and operation phase strategies of energy transition projects. The papers provide deep analyses into the issues and risks associated with large-scale, complex and potentially interfacing greenfield projects, including:
The full 500+ page Guide can be downloaded here. Alternatively, you can explore the papers, filtering by topic and area of interest.
Varya Davidson
Chris McLean
Nick Li
Rhiannon Hough
Giga-scale energy transition projects are not the traditional project - i.e. projects with a single asset, single revenue stream and single turnkey solution - that we have seen financed by commercial debt providers or undertaken on balance sheets over the last few decades. They are characterised by a number of bespoke features, including:
We discuss these key aspects, including what is required to meet investment and financing criteria imposed by commercial banks, export credit agencies and multi-lateral financiers throughout the lifecycle of a project and in the current energy transition landscape.
Developers, equity investors and debt financiers now also need to consider the management of human capital, supply chain transparency and resilience, governance structures and the importance of a culture of collaboration and compliance.
Our detailed position papers provide strategies from a financial, commercial and legal perspective for identifying, analysing and mitigating risks, including:
We provide guidance on these key issues and commentary on how to navigate challenges that might arise, including:
A key feature of this section is our guide to different delivery models (with a particular focus on models attached to disaggregated packaging structures in giga energy transition projects in a project finance context), designed to enable developers, equity investors, debt financiers and other project participants to undertake a more informed assessment of the delivery model that suits the scale and complexity of the project, the asset type, the relevant timelines and overall risk appetite.
In terms of human capital, developers, equity investors and debt financiers look for processes and systems to be in place to ensure regulatory compliance, strong governance, and technology options that improve safety and reduce cost and risk. These issues should all be considered in developing the all project agreements underpinning the development and delivery phases and also the operations phase.
In addition, there is a greater need for supply chain transparency and for local optionality which avoids the climate change cost of long haul transport. Developers and operators will rely more heavily on stock and inventory, and on clear access to IP and technical data for maintenance activities and mid-life upgrades.
If the asset underperforms in the generation of revenue prior to commercial operation and during the early stages of operation, then the developer’s development service fee and equity investors’ return and debt financiers’ debt provision is at risk. These can include output and efficiency risks, outage risk, supply chain, logistics and workforce constraints, regulatory and political risk which have all been heightened by COVID together with the increased focus on the environmental and social elements of an ESG decision making framework.